Practicing Ethics:
A HANDBOOK FOR MUNICIPAL LAWYERS, 2ND EDITION
COUNTY OF SACRAMENTO OFFICE OF THE ASSESSOR
Acknowledgements
The League of California Cities gratefully acknowledges the contributions
of the Practicing Ethics Drafting Committee for their hard work
and dedication in drafting this Handbook:
Steve Dorsey, Committee Chair
City Attorney, Buena Park,
Norwalk and San Marino
Richard Watsons Gershon
Michele Beal Bagneris
City Attorney, Pasadena
Joan A. Borger
City Attorney, Sunnyvale
Damien Brower
City Attorney, Brentwood
Ariel Pierre Calonne
City Attorney, Santa Barbara
Buck Delventhal
Deputy City Attorney, San Francisco
Ruben Duran
Burke Williams Sorensen, LLP
Steven L. Flower
Assistant City Attorney, Seal Beach
and Rancho Cucamonga
Richards, Watson & Gershon
Aaron C. Harp
City Attorney, Newport Beach
Craig Labadie
City Attorney, Albany
Law Offices of Craig Labadie
Joseph W. Pannone
City Attorney, Baldwin Park,
Bellflower and Lompoc
Aleshire & Wynder, LLP
Gregory P. Priamos
President, City Attorneys’ Department
City Attorney, Riverside
Kenneth D. Rozell
Sr. Deputy City Attorney, Merced
League Staff:
Patrick Whitnell, General Counsel
Koreen Kelleher, Assistant General
Counsel
Janet M. Leonard, Legal Assistant
This publication is provided for general information only and is not offered or intended as legal
advice. Readers should seek the advice of an attorney when confronted with legal issues and
attorneys should perform an independent evaluation of the issues raised in these materials.
Copyright © 2004, 2014 by the League of California Cities®, Sacramento, California
All rights reserved. This publication, or parts thereof, may not be reproduced in any form
without the League’s permission. For information, contact the League of California Cities,
1400 K Street, 4th Floor, Sacramento, CA 95814 (916) 658-8200.
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TABLE OF CONTENTS
Contents
Foreword............................................................................................................................................................................................3
Chapter 1:....................................................................................................................................................................................4
DEFINING THE CLIENT: WHOM DOES THE CITY ATTORNEY REPRESENT?..........................................................................4
A.INTRODUCTION.............................................................................................................................................................................4
B. THE CITY IS THE CLIENT..............................................................................................................................................................4
C. RULE 3-600.....................................................................................................................................................................................4
D. THE “HIGHEST AUTHORIZED OFFICER, EMPLOYEE, BODY, OR CONSTITUENT”...............................................................5
E. REPRESENTING MORE THAN ONE CLIENT...............................................................................................................................5
F. CITY ATTORNEY’S RIGHT TO REPORT MATTERS UP THE HIERARCHY................................................................................5
G. CITY ATTORNEY’S DUTY NOT TO TREAT CITY OFFICIAL AS CLIENT OR TO PROMISE CONFIDENTIALITY..................6
H. JOINT REPRESENTATION OF THE CITY AND ITS EMPLOYEES..............................................................................................6
CHAPTER 2................................................................................................................................................................................8
CONFLICTS OF INTERESTS ARISING FROM THE CITY ATTORNEY’S SIMULTANEOUS
OR SUCCESSIVE REPRESENTATIONS......................................................................................................................................8
A.INTRODUCTION.............................................................................................................................................................................8
B. RULE 3-310 AND CLIENT REPRESENTATION............................................................................................................................8
C. SIMULTANEOUS AND SUCCESSIVE REPRESENTATION OF CLIENTS WITH ADVERSE INTERESTS.................................8
1. Simultaneous Representation................................................................................................................................8
2. Successive Representation....................................................................................................................................8
D. SPECIAL CONSIDERATIONS FOR ATTORNEYS IN THE PUBLIC SECTOR.............................................................................9
E. TWO OR MORE SEPARATE “CLIENTS” WITH ADVERSE INTERESTS AND RULE 3-310.....................................................9
1. Representing Quasi-Independent Bodies and Officials and Joint Power Authorities..........................................10
2. Defending City Employees Pursuant to the Government Claims Act..................................................................10
F. OBTAINING INFORMED WRITTEN CONSENT.........................................................................................................................12
G. ETHICAL WALLS TO AVOID CONFLICTS
OF INTEREST................................................................................................................................................................................12
CHAPTER 3: ..........................................................................................................................................................................14
THE POLITICAL REFORM ACT: ETHICAL CONSIDERATIONS FOR THE CITY ATTORNEY....................................................14
A.INTRODUCTION...........................................................................................................................................................................14
B. THE POLITICAL REFORM ACT APPLIES TO BOTH IN-HOUSE AND CONTRACT CITY ATTORNEYS...............................14
C. DECISIONS AFFECTING THE CITY ATTORNEY’S COMPENSATION OR PAYMENTS
TO THE CITY ATTORNEY’S LAW FIRM.....................................................................................................................................14
D. DECISIONS AFFECTING OTHER CLIENTS OF THE CITY ATTORNEY...................................................................................16
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
CHAPTER 4..............................................................................................................................................................................18
CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS: CONFLICTS OF INTEREST
UNDER GOVERNMENT CODE SECTION 1090........................................................................................................................18
A.INTRODUCTION...........................................................................................................................................................................18
B. GOVERNMENT CODE SECTION 1090 AND CITY ATTORNEYS GENERALLY......................................................................18
1. Elements of a Section 1090 Violation...................................................................................................................18
2. Exceptions: Non-Interests and Remote Interests.................................................................................................21
3. Rule of Necessity...................................................................................................................................................22
4. Penalties for Violations.........................................................................................................................................23
C. IDENTIFYING AND ANALYZING POTENTIAL CONFLICTS OF INTEREST UNDER SECTION 1090..................................23
1. Negotiating City Attorney Employment Contracts...............................................................................................23
2. Representing the City in Negotiating Employee Benefit Changes that
May Also Affect an In-house City Attorney..........................................................................................................24
3. Negotiating to Provide Additional Legal Services................................................................................................24
4. Contracts Between the City and Another Client of City Attorney’s Law Firm.....................................................25
5. Serving as Legal Counsel to a Joint Powers Authority.........................................................................................26
D. OTHER RESOURCES....................................................................................................................................................................26
CHAPTER 5:............................................................................................................................................................................28
THE CITY ATTORNEY’S ROLE AS PROSECUTOR...................................................................................................................28
A.INTRODUCTION...........................................................................................................................................................................28
B. FACTORS TO CONSIDER WHEN FILING CRIMINAL CASES..................................................................................................28
1. Impartiality and Objectivity...................................................................................................................................28
2. Probable Cause.....................................................................................................................................................28
3. Prosecutorial Immunity........................................................................................................................................29
4. Conflicts of Interest of the City Attorney.............................................................................................................29
C. CRIMINAL ACTIONS CANNOT BE USED TO GAIN AN ADVANTAGE IN CIVIL CASES.....................................................30
D. CONTRACT CITY ATTORNEYS AND THE ABILITY TO PROVIDE CRIMINAL DEFENSE SERVICES..................................31
CHAPTER 6:............................................................................................................................................................................33
THE CITY ATTORNEY AND OUTSIDE COUNSEL....................................................................................................................33
A.INTRODUCTION...........................................................................................................................................................................33
B. AVOID IMPROPER GROUNDS FOR HIRING OR FIRING OUTSIDE LAWYERS.....................................................................33
1. Rule 2-400.............................................................................................................................................................33
2. State and Federal Laws........................................................................................................................................33
3. Decisions to Terminate Outside Counsel Based on the Lawyer’s Public Criticism..............................................34
C. DEVELOP AND USE STANDARD
CONTRACTING PROCEDURES..................................................................................................................................................34
D. CONFLICTS OF INTEREST..........................................................................................................................................................35
E. BILLING AND OTHER PRACTICES OF THE OUTSIDE FIRM...................................................................................................35
F. SPECIAL RULES FOR OUTSIDE COUNSEL IN CIVIL PUBLIC NUISANCE CONTINGENCY FEE ARRANGEMENTS.......36
G. CONFIDENTIALITY OF OUTSIDE COUNSEL BILLING RECORDS..........................................................................................37
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TABLE OF CONTENTS
CHAPTER 7: ..........................................................................................................................................................................38
THE DUTY OF CONFIDENTIALITY...........................................................................................................................................38
A.INTRODUCTION...........................................................................................................................................................................38
B.CONFIDENTIALITY......................................................................................................................................................................38
1. Confidentiality in the Public Sector......................................................................................................................38
2. Government Malfeasance....................................................................................................................................39
3. Grand Jury Proceedings........................................................................................................................................40
C. WHISTLEBLOWING STATUTES AND THE DUTY OF CONFIDENTIALITY.............................................................................40
1. California Whistleblower Protection Act (CWPA)..................................................................................................40
2. Whistleblower Protection Act (WPA)....................................................................................................................40
3. Local Government Disclosure of Information Act (LGDIA)...................................................................................40
4. Whistleblower Protection Statute (WPS)..............................................................................................................41
D. THE WHISTLEBLOWER LAWS VS. THE DUTY OF CONFIDENTIALITY.................................................................................41
1. Statutory Reconciliation.......................................................................................................................................41
2. Lack of Express Provisions Overturning Well-Established Law............................................................................41
3. Separation of Powers...........................................................................................................................................41
CHAPTER 8: ..........................................................................................................................................................................43
THE CITY ATTORNEY AND GRAND JURIES...........................................................................................................................43
A.INTRODUCTION...........................................................................................................................................................................43
B. CALIFORNIA LAW.......................................................................................................................................................................43
C. FEDERAL LAW.............................................................................................................................................................................44
D. ETHICAL ISSUES RAISED BY WORK INVOLVING GRAND JURIES.......................................................................................45
1. Who is the Client?.................................................................................................................................................45
2. The Attorney-Client Privilege and Attorney Work-Product Privilege ...................................................................45
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
Chapter 1:
DEFINING THE CLIENT: WHOM DOES THE CITY ATTORNEY REPRESENT?
A.INTRODUCTION
C. RULE 3-600
Lawyers owe the duties of both undivided loyalty and
confidentiality to their clients.1 For the city attorney who
represents a public entity the question often arises, “Who
is the client?” This chapter discusses the nature of the
professional relationship between the city attorney and his
or her client.
Rule 3-600 governs the ethical obligations of the city
attorney. Under the Rule, the city attorney owes these
obligations to the city itself — as the client — and not to any
individual public official or community member. This Rule is
also consistent with case law.4 The Rule obviates the need
for the disqualification of the city attorney when council
members are at odds with one another over an issue, or
when the council and city manager have a dispute.
It is the duty of an attorney to … maintain inviolate
the confidence, and at every peril to himself or
herself to preserve the secrets, of his or her client.2
B. THE CITY IS THE CLIENT
Case law and the California Rules of Professional Conduct
(referred to hereafter collectively as “Rules” and individually
as “Rule”) are clear: the city attorney’s client is the city itself,
“acting through its highest authorized officer, employee,
body, or constituent overseeing the particular engagement.”3
Understanding that the city itself is the client is critical,
especially when the interests of the city may conflict with
those of its officials or employees.
Generally, an attorney’s duties of loyalty and confidentiality
may be challenged when the interests of two or more
clients conflict with one another. If the city attorney’s client
were defined as each city official or employee who interacts
with the city attorney, then a conflict of interest could arise
every time two or more of these individuals had opposing
interests. As a result, each party would be entitled to his or
her own attorney. Fortunately, this is not the case in the vast
majority of situations confronting the city attorney.
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Practice Tip:
Government Code Section 41801 and some city
charters contain language requiring the city attorney
to advise specified officials. These provisions have no
effect on the underlying principle that the city itself
is the client. City officials are merely embodiments of
the city, and the city attorney does not have a conflict
of interest simply because the officials may have
opposing agendas or positions.
That the city itself, and not any particular official or
subordinate board, is the city attorney’s client is important
because the city attorney typically advises individuals
along the entire chain in the city’s hierarchy. Since these
individuals are the embodiments of the city — and not
separate and independent clients — the city attorney has no
obligation to keep information obtained from one individual
confidential from others in the hierarchy. This is significant
because a city attorney typically has to gather information
from a number of officials in order to provide legal advice
and representation to the city.
CHAPTER 1: DEFINING THE CLIENT:
However, because of due process requirements the same
attorney from the city attorney’s office may not be able to
prosecute an administrative action or assist staff with the
prosecution of an administrative action and also serve as the
advisor to that administrative tribunal.5 A due process wall
may allow different attorneys in an in-house city attorney’s
office to both advocate and advise as long as proper
screening functionally separates attorneys performing the
two functions.6 But the same will most likely not hold true
for contract city attorneys and special counsel attorneys
from the same outside law firm serving in those dual roles.7
Because the rules in this area of the law are changing
rapidly,8 it is critical to carefully review the relevant case law.
D. THE “HIGHEST AUTHORIZED OFFICER,
EMPLOYEE, BODY, OR CONSTITUENT”
While the city attorney has but one client — the city
itself — he or she may take directions from a number
of different individuals. Determining who speaks for the
city as the “highest authorized officer, employee, body, or
constituent”9 at any given time requires a review of the
organic law of the city.
For example, under the council-manager form of
government,10 the city manager is the “highest authorized
officer” when it comes to terminating or disciplining a city
employee.11 As a result, most city attorneys conclude that
there is no legal basis to allow council members to view
personnel records of all city employees. Unlike the city
manager, council members play no role in the day-to-day
hiring, discipline, and firing of these employees.
However, the city council does hire, evaluate, and fire the
city manager. As a result, the council may review employee
files if it can make a particularized showing that city
employee personnel files are necessary for a performance
evaluation of the city manager. In that event, the “highest
authorized body” would be the city council acting through
formal actions taken by a majority of its members. As a
result, the city attorney may take his or her direction from
the council in providing access to the files solely for the
purpose of facilitating the evaluation of the city manager.
Furthermore, if the city manager’s management practices
become the subject of a lawsuit — or the threat of a lawsuit
— the city council would have the authority to direct the
resolution of the matter. The council could act by stipulating
to reinstatement and payment of back pay to the affected
city employee. This is true even though the city manager
would normally be the “highest authorized official” in charge
of city personnel issues.
E. REPRESENTING MORE THAN ONE CLIENT
There are times when the city attorney has more than one
client. The most common example of this is where the city
attorney is representing an employee who is being sued —
along with the city — in a lawsuit. Also a quasi-independent
city board, official or agency (collectively “agency”) could
become a separate client under exceptional circumstances
where the city and the agency become adverse to one
another in litigation. The city attorney may provide advice
to both the city and the agency in a particular matter.
Nevertheless in the event of litigation over the matter
where the agency and the city are adverse, the city attorney
who chose to advise both may not represent either in the
litigation. In the alternative, the city attorney foreseeing
potential adversity between the city and the agency may
elect at the outset of the matter to advise the city and
inform the agency that it will need outside counsel.12
F. CITY ATTORNEY’S RIGHT TO REPORT MATTERS
UP THE HIERARCHY
When a city attorney learns that the conduct of a city official
or employee is or may be a violation of law that may be
“reasonably imputed to the organization” or is “likely to
result in substantial injury to the organization,” State Bar
rules expressly authorize the city attorney to take the matter
to the “highest internal authority within the organization.”13
While reporting such activity up the city’s hierarchy, the city
attorney must not disclose any confidential information
beyond the organization itself. Whistleblower statutory
protections applicable to employees of state and local public
entities14 do not supersede the statutes and rules governing
the attorney-client privilege.15
Finally, in the event the “highest internal authority” fails to
heed the city attorney’s advice and that failure is likely to
result in substantial injury to the client, the city attorney
retains the right or, where appropriate, the obligation to
resign employment pursuant to Rule 3-700.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
G. CITY ATTORNEY’S DUTY NOT TO TREAT
CITY OFFICIAL AS CLIENT OR TO PROMISE
CONFIDENTIALITY
Whenever the city attorney becomes aware that the
interests of a city official or employee may be adverse to
those of the city, Rule 3-600(D) requires the city attorney
to make clear that he or she represents the city and not
the individual official or employee. The city attorney should
advise the individual that the city attorney cannot withhold
any information the individual shares from others in the city
with authority over the matter.16 A clear admonition may
help prevent the official from misperceiving the nature of a
communication with the city attorney.
Walking this line can be difficult. A city attorney who
commences every meeting with city officials with a warning
that they are not his clients is not likely to have a productive
relationship with the officials. However this issue is handled,
do not promise confidentiality to individual council members
or other city officials or lead them to believe they have a
confidential relationship. Further, the city attorney must
let the officials know he or she will share information the
official provides to any official or agency in the city with a
business need to know.
For example, a council member’s conflict of interest may
be of critical importance to the entire council if the council
member does not disqualify himself or herself and that
failure to do so could invalidate the council’s action. The city
attorney should make clear that conflict of interest advice is
provided to a council member in his or her official capacity
and such advice is subject to disclosure to the entire
council. This may be true of other types of advice to council
members and to other city officials, such as an opinion
on whether legislation proposed by a council member is
preempted or unconstitutional.
It is advisable to make it clear from the outset that the city
attorney owes the duty of loyalty and confidentiality to the
city itself — and the council as a whole — rather than to an
individual. Some city attorneys make it a practice to provide
standing memoranda to elected officials and staff explaining
this principle.
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Practice Tip
The California Attorney General has opined that when
a city attorney obtains information in confidence
from a council member under circumstances leading
the council member to believe that a confidential
relationship exists between the city attorney and the
council member, the city attorney is precluded from
prosecuting the council member under the Political
Reform Act.17
H.JOINT REPRESENTATION OF THE CITY
AND ITS EMPLOYEES
Rule 3-600(E) requires the consent of the city before the city
attorney may undertake the representation of an individual
official or employee. However, the Government Tort Claims
Act imposes a mandatory duty on the city to defend and
indemnify public officials and employees.18 While this
statutory obligation, in effect, constitutes the city’s consent
to employee representation by operation of law (though
not necessarily by the city attorney), these areas of joint
representation can create conflicts of interest (see chapter 2).
CHAPTER 1: DEFINING THE CLIENT:
CHAPTER 1 ENDNOTES
1
City and County of San Francisco v. Cobra Solutions, Inc., 38 Cal.4th
839, 846 (2006); Havasu Lakeshore Investments, LLC v. Fleming, 217
Cal.App.4th 770 (2013); California Rules of Professional Conduct,
Rule 3310(C) & (E).
2
California Business and Professions Code section 6068(e)(1).
3
California Rules of Professional Conduct, Rule 3-600(A); La Jolla
Cove Motel & Hotel Apartments, Inc. v. Superior Court, 121 Cal.
App.4th 773, 784-785 (2004); Brooklyn Navy Yard Cogeneration
Partners v. Superior Court, 60 Cal.App.4th 248, 254-255 (1997);
Skarbrevik v. Cohen, 231 Cal.App.3d 692, 703-704 (1991).
4
Ward v. Superior Court, 70 Cal.App.3d 23, 32 (1977) [county
counsel’s only client is County of Los Angeles and had no separate
attorney-client relationship with the county assessor and other
county officials that he represented as part of his duties as
county counsel; thus county counsel was not disqualified from
representing the county assessor in his individual capacity and
subsequently representing the county in a suit brought against it by
the county tax assessor, who was himself suing as an individual and
taxpayer]. But see People ex rel. Deukmejian v. Brown, 29 Cal.3d
150 (1981) [where Attorney General had given confidential advice
to client board, he is subsequently precluded from suing the board
on the very same matter]. California Rules of Professional Conduct,
Rule 3-600(B). [See also cases cited in Endnote 3.]
5
6
Nightlife Partners, Ltd. v. City of Beverly Hills, 108 Cal.App.4th 81
(2003); Quintero v. City of Santa Ana, 114 Cal.App.4th 810 (2003).
See also Department of Alcoholic Beverage Control v. Alcoholic
Beverage Control Appeals Bd., 40 Cal.4th 1, 10 (2006) [“Procedural
fairness does not mandate the dissolution of unitary agencies, but
it does require some internal separation between advocates and
decision makers to preserve neutrality”]; see also chapter 2.
Howitt v. Superior Court, 3 Cal.App.4th 1575, 1586-1587 (1992).
See also Department of Alcoholic Beverage Control v. Alcoholic
Beverage Control Appeals Bd., 40 Cal.4th 1, 10-11 (2006);
Richardson v. City and County of San Francisco Police Com., 214
Cal.App.4th 671, 705 (2013).
7
Sabey v. City of Pomona, 215 Cal.App.4th 489 (2013).
8
Today’s Fresh Start, Inc. v. Los Angeles County Office of Education,
57 Cal.4th 197 (2013); see also chapter 2.
9
California Rules of Professional Conduct, Rule 3-600(A); Brooklyn
Navy Yard Cogeneration Partners v. Superior Court, 60 Cal.App.4th
248, 254 (1997).
12 People ex. rel. Deukmejian v. Brown, supra, 29 Cal.3d 150. (Rule
3-310 prohibits Attorney General from suing client department
on a matter on which he advised that department); accord, Santa
Clara County Counsels Assn. v. Woodside, 7 Cal.4th 525, 548 (1994)
[“duty of loyalty for an attorney in the public sector does not differ
appreciably from that of the attorney’s counterpart in private
practice”]; Civil Service Comm. v. Superior Court, 163 Cal.App.3d 70,
75-78 (1984) [under Rule 3-310, county counsel may not represent
county board of supervisors in suit against county’s civil service
commission, where county counsel’s office advised commission on
same matter and county failed to obtain the commission’s informed
written consent to subsequent adverse representation of the board
of supervisors in its suit to invalidate the commission’s decision];
State Bar of Cal. Standing Comm. on Prof’l Responsibility and
Conduct, Formal Op. 2001-156, WL 34029610; see also chapter 2.
13 California Rules of Professional Conduct, Rule 3-600(B). See also
Responsible Citizens v. Superior Court, 16 Cal. App. 4th 1717, 1731,
fn. 5 (1993) and Labor Code Section 1102.5, subd. (g).
14 These whistleblower protections include Labor Code Section
1102.5, which prohibits employers from retaliating against
employees for reporting an alleged violation of a state or federal
statute, rule, or regulation. Protected activity under this statute
does not cover reporting violations of local law. Edgerly v. City of
Oakland, 211 Cal.App.4th 1191, 1199 (2012).
15 84 Ops. Cal. Atty. Gen. 71, 78 (2001). See also Cordero-Sacks v.
Housing Authority of City of Los Angeles, 200 Cal. App. 4th 1267,
1278 (2011) [citing holding of Attorney General’s opinion]; see also
chapter 7.
16 State Bar of Cal. Standing Comm. on Prof’l .Responsibility and
Conduct, CA Eth.Op. 2001-156, WL 34029610.
17 71 Ops. Cal. Atty. Gen. 255 (1988).
18 California Government Code section 995 provides, in part:
“[U]pon request of an employee or former employee, a public entity
shall provide for the defense of any civil action or proceeding
brought against him, in his official capacity or individual capacity
or both, on account of an act or omission in the scope of his
employment as an employee of the public entity.”
10 Government Code Section 34851 to 34859; Stahm v. Klein, 179 Cal.
App.2d 512, 514 (1960); 81 Ops.Cal.Atty.Gen. 304, 307-308 (1998).
11 In some charter cities, multiple city officials are directly appointed
by the city council and can be removed only by the city council.
In those situations, the city manager would not be the “highest
authorized officer” when it comes to terminating or disciplining
those city officials.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
CHAPTER 2
CONFLICTS OF INTERESTS ARISING FROM THE CITY ATTORNEY’S SIMULTANEOUS
OR SUCCESSIVE REPRESENTATIONS
A.INTRODUCTION
Rule 3-310 broadly prohibits a range of possibly
conflicting interests, including personal business
or other interests of the lawyer that are adverse to
those of the client. This chapter examines conflicts of
interests arising from the simultaneous or successive
representation of clients that are particular to city
attorneys. These conflicts arise when the city attorney
represents more than one public client whose interests
conflict with one another.
City attorneys also need to be aware of conflicts between
the interests of their public and current or former private
clients. These conflicts are the same as conflicts between
the interests of private clients and are discussed only
briefly in this chapter.
B. RULE 3-310 AND CLIENT REPRESENTATION
Rule 3-310 governs conflicts of interest arising from the
representation of two clients who may be adverse to one
another. Subsection (C) of the Rule provides, in pertinent
part, as follows:
A member shall not, without the informed written consent
of each client:
(1)Accept representation of more than one client
in a matter in which the interests of the clients
potentially conflict; or
(2)Accept or continue representation of more than one
client in a matter in which the interests of the clients
actually conflict; or
(3)Represent a client in a matter and at the same time
in a separate matter accept as a client a person or
entity whose interest in the first matter is adverse to
the client in the first matter.
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C. SIMULTANEOUS AND SUCCESSIVE
REPRESENTATION OF CLIENTS WITH ADVERSE
INTERESTS
Conflicts of interest can arise when a city attorney’s
current or former clients have interests that are adverse
to those of the city. Such conflicts of interest generally
fall into two categories: (1) simultaneous representation
of clients with adverse interests; and (2) successive
representation of clients with adverse interests.
1. Simultaneous Representation
The simultaneous representation of clients with adverse
interests arises when the same lawyer, firm, or office
concurrently represents those clients in either the same
or a different matter. Simultaneous representation as
to the very same matter is prohibited per se because it
violates the attorney’s duty of loyalty and confidentiality.
Practice Tip:
Notwithstanding the language of Rule 3-310, clients
cannot give informed written consent in cases of
simultaneous representations of adverse interests as
to the very same matter.1
2. Successive Representation
The successive representation of clients with
adverse interests arises when the representation
of a current client is adverse to the interests of a
former client. Successive representation is prohibited
if there is a substantial relationship between the
current matter and the prior representation. If
there is, it is presumed that the lawyer acquired
confidential information from prior representation.
Accordingly, Rule 3-310 bars the subsequent adverse
representation without the prior client’s informed
written consent to the later representation.
CHAPTER 2: CONFLICTS OF INTERESTS
Practice Tip:
Practice Tip:
Under the rule of vicarious disqualification, not only
is the lawyer who represented the former client
disqualified; his or her entire firm or office is also
disqualified. The major ethical concern in cases of
successive representation is the violation of the duty
of confidentiality.2
In the public sector, because of the somewhat
lessened potential for conflicts of interest and the
cost to the public for disqualifying whole offices of
government funded attorneys, the use of internal
screening procedures or “ethical walls” to avoid
conflicts have been allowed unless the disqualified
attorney is the head of the office. However, this
general rule does not equally apply to city attorneys
who are members of law firms and also does not apply
equally to due process walls.6
D. SPECIAL CONSIDERATIONS FOR ATTORNEYS
IN THE PUBLIC SECTOR
The courts weigh special considerations before finding
that a public law office must be disqualified because an
attorney’s prior representation of a party is adverse to
the public entity for which the lawyer now works. The
general rule is that “a public attorney, acting solely and
conscientiously in a public capacity, is not disqualified to
act in one area of his or her public duty solely because
of similar activity in another such area.”3 “The question,
therefore, is not whether a lawyer in a particular
circumstance ‘may’ or ‘might’ or ‘could’ be tempted to do
something improper, but whether the likelihood of such
a transgression, in the eye of the reasonable observer, is
of sufficient magnitude that the arrangement ought to be
forbidden categorically.”4
Conflict of interest rules were drafted with private
attorneys primarily in mind. In the public sector, the
financial incentive to favor particular clients over others
or to ignore conflicts is reduced if not eliminated. Courts
have recognized in this context that disqualification of
a public attorney can result in minimal benefits while
causing dislocation and public expense. For these
reasons courts have not assumed that the existence of
a conflict of interest for one member of a public entity’s
legal office warrants disqualification of the entire office.5
E. TWO OR MORE SEPARATE “CLIENTS” WITH
ADVERSE INTERESTS AND RULE 3-310
The city attorney’s client is the city itself, as embodied in
the city council or other highest official or agency over
the engagement.
Government Code section 41801 provides that “[t]he
city attorney shall advise the city officials in all legal
matters pertaining to city business.”
The city attorney always advises city officials in their
official capacity not as individuals with interests separate
and distinct from the city. Because the city attorney
represents the city as a single client entity, the adverse
interests of two or more city officials generally does not
give rise to a conflict under Rule 3-310.
For example, county counsel is not disqualified from
representing the county in a lawsuit filed by the county
assessor merely because the assessor and county
counsel exchanged confidential information concerning
the operation of the assessor’s office. Assessors are
not independent, but are under the supervision of the
county board of supervisors. The information exchanged
between the assessor and county counsel is therefore
not confidential as to the county and accordingly not
grounds for disqualification.7
Similarly, a city attorney may advise both the mayor and
city council as to the legality of an ordinance where the
council has the power to adopt the ordinance under the
city charter and the mayor has the power to veto it. The
mayor and council may have antagonistic positions, but
the city attorney’s client is the city.8
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
There are, however, circumstances where individual
officials or agencies of a public entity can acquire
separate client status even though they are not
necessarily separate legal entities. The most common of
these circumstances are: (1) disputes between the city
and its quasi-independent boards or commissions or
joint powers authorities of which the city is a member;
and (2) the defense of city employees pursuant to the
Government Claims Act.
A city attorney who represents a JPA should also be
aware of the Political Reform Act (see chapter 3) and
Government Code section 1090 (see chapter 4) issues
that can arise in the course of representing a JPA.
1. Representing Quasi-Independent Bodies and
Officials and Joint Power Authorities
The Government Code sets out a comprehensive
statutory scheme for determining the rights of public
employees to a defense and indemnification from their
employing entities with respect to suits filed against
them arising out of the course and scope of their
employment.11 The duty to provide a defense is imposed
by Government Code section 995, which provides in
pertinent part as follows:
A conflict can arise when the city council and a
subordinate quasi-independent body or official are
involved in litigation against one another. This situation
is most likely to arise in charter cities if the charter
creates a quasi-independent official or body with the
ability to make a binding decision and the city council
seeks to overturn that decision by filing suit against the
subordinate body.9 By contrast, general law cities are
generally more hierarchical in structure, with the council
clearly established as the final decision maker with
respect to most subordinate bodies.
Civil service commissions and rent control boards
are examples of bodies that can acquire quasiindependent status under the Rules.
Representing a joint powers authority (“JPA”) can give
rise to conflicts in a manner similar to quasi-independent
bodies where an attorney who represents one of the
participating public agencies is selected to act as an
attorney for the JPA.
Agreeing ahead of time as to how to resolve conflicts
between the JPA and its participating agencies can avoid
problems when the conflicts arise. In Elliott v. McFarland
Unified School District,10 for example, two school districts
entered into a joint powers agreement and the agency
created was represented by counsel for one of the
districts. The parties agreed that if a conflict of interest
arose between the members of the JPA, the counsel
representing the JPA could continue to represent his own
district. The other district with a conflicting interest would
obtain its own counsel since it had granted informed
written consent to the successive adverse representation
by the JPA counsel of his own district.
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2. Defending City Employees Pursuant to the
Government Claims Act
a. The City’s Duty to Defend City Officials and
Employees
Except as otherwise provided in sections 995.2 and 995.4,
upon request of an employee or former employee, a public
entity shall provide for the defense of any civil action or
proceeding brought against him, in his official or individual
capacity or both, on account of an act or omission in the
scope of his employment as an employee of the public
entity. For the purposes of this part, a cross-action,
counterclaim or cross-complaint against an employee or
former employee shall be deemed to be a civil action or
proceeding brought against him.12
The duty to defend under Government Code section
995.2 is subject to three limitations:
»» The act or omission giving rise to the action
must have been within the employee’s scope of
employment;
»» The employee cannot have acted or failed to act
because of actual fraud, corruption, or actual malice;
and
»» Defense of the action or proceeding by the public
entity cannot create a specific conflict of interest
between the public entity and the employee or
former employee.
CHAPTER 2: CONFLICTS OF INTERESTS
For purposes of the third limitation a “specific conflict
of interest” is a conflict of interest or an adverse or
pecuniary interest, as specified by statute or by a rule
or regulation of the public entity. Thus, the statute
contemplates that a “specific conflict of interest” could
result in the separate representation of the entity and the
employee.
In the context of the Government Claims Act defenses,
conflicts of interests requiring careful analysis of Rule
3-310 typically arise when:
»» The city attorney undertakes the defense of
an employee in tort litigation, and the city is
contemplating adverse personnel action against that
employee; or
»» The city defends an employee under a reservation
of rights because the act or omission may not have
arisen in the course and scope of employment.
The Government Code allows the public entity to
provide for the employee’s defense by “its own attorney
or by employing other counsel for this purpose or by
purchasing insurance which requires that the insurer
provide the defense.”13 Furthermore, the code provides
that (1) where the employee has timely requested
the defense, (2) the act or omission arose out of the
course and scope of the public employment, and (3) the
employee has cooperated in good faith in the defense,
the entity must pay any judgment arising from the suit
or any settlement or compromise “to which the entity
has agreed.”14 These sections have been interpreted to
give the public entity – not the employee – the right to
control the employee’s defense15 and to decide whether
a conflict of interest exists.16
The statutory scheme also permits the public entity to
assume the defense of the employee under a reservation
of rights as to whether the act or omission arose out
of the course and scope of employment. In addition,
it permits the public entity to pay the judgment or
settlement “only if it is established that the injury arose
out of an act or omission occurring in the scope of his or
her employment as an employee of the public entity.”17
If the governing body makes certain findings, the public
entity may indemnify the employee against an award of
punitive damages as well.18
b. Joint Representation of a City and its Employees in
Litigation
Whenever an employee is potentially subject to discipline
for the same acts as those at issue in the suit, there
will always be a conflict of interest under Rule 3-310
because the interests of the entity as the empolyer and
the individual are adverse to one another. Under those
circumstances the same lawyer simply may not represent
both the employee and the employer. Since under Rule
3-600 the entity itself is the city attorney’s primary
client, it is the employee’s or official’s representation
that should be contracted out while the city attorney
continues to represent the entity. Occasionally this is not
feasible. For example, where the subordinate official was
advised by the city attorney’s office before informing the
official that the city could have an adverse position, the
city attorney will have to withdraw from representing
both sides of the dispute.
Law firms and large city attorney law offices employ
ethical screening devices to wall off the lawyers
prosecuting a disciplinary matter from the lawyers
handling a tort suit. If a sufficient ethical wall cannot
be created and maintained, outside counsel should be
retained to represent the employee.
The way to avoid hiring duplicative counsel is to try to
resolve any disciplinary issues at the claims stage, when
there is only a single client, the city. If possible, an ethical
wall should be erected before the duty to defend arises. It
is only when a suit is filed that the city’s duty to defend the
employee under the Government Claims Act is triggered.
Up to that point, the claim is simply filed with the city to
evaluate and the city attorney represents a single client,
the city.
If the disciplinary issue is resolved by the time suit is filed,
the city and the employee will no longer have adverse
interests and the city attorney will be able to represent both
the city and the employee without violating Rule 3-310.
Although the Government Claims Act imposes time limits
to respond to claims and gives the claimant the right to sue
when the entity fails to act on the claim within statutory
deadlines, the city can agree to toll time limits and take
more time at the claims stage to either resolve the case
or to ensure that a suit is not filed until after any possible
adversity is eliminated.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
That punitive damages are sought is not sufficient to trigger
a conflict of interest between the entity and the employee
and require separate representation.19 Further, in DeGrassi v.
Glendora, the court held that a city had no duty to reimburse
a city council member for retaining a private lawyer to
defend her in a suit brought against her in her official
capacity, where the council member refused to agree to the
city’s condition that cooperate in her defense and allow the
city to control the defense.20
Where a potential issue in litigation against a public
agency and its employee is whether the employee was
acting within the course and scope of employment,
the public agency may undertake the defense with a
reservation of rights as to that issue. Nevertheless, such
a reservation may place in question the ability of the city
attorney to defend both the city and the employee. For
this reason a better practice may be to decide the course
and scope of employment issue before undertaking
representation of the employee. Either decide to provide
the defense without a reservation of rights or, in the
rare situation where there is a significant course and
scope issue, inform the employee that the city will not
undertake his or her defense thereby assuming the risk
that a court will find the employee was in the course and
scope requiring the city to pay for the defense.21
For More Information: For a more
detailed discussion of the issues presented by
the joint defense of the entity and its employees
and officials, see Manuela Albuquerque, Joint
Defense of Suits Brought Against Public Entities
and Their Employees: Are Conflicts of Interest
Manufactured or Real?, 24 Pub. L.J. 1 (2000),
available at www.cacities.org/attorneys.
F. OBTAINING INFORMED WRITTEN CONSENT
Rule 3-310 allows representation of clients with actually
or potentially conflicting interests if the attorney
first obtains each client’s informed written consent.
This requires each client’s written agreement to the
representation following written disclosure of the
relevant circumstances and of the actual and reasonably
foreseeable adverse consequences to the client.
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The particular problem for city attorneys in obtaining
consent is determining who can provide it on the city’s
behalf. As discussed in Chapter 1, determining who
speaks for the city in a given matter depends on who
is the highest, authorized officer, employee, body, or
constituent of the city. In many cases, this will mean
obtaining the informed written consent of the city council
or city manager. The particular facts of each case must
be carefully evaluated to ensure that the person or
body authorized to speak on the city’s behalf gives the
consent. In some cases, that person may be the city
attorney.
Practice Tip:
Remember that informed written consent must be
based upon the circumstances actually contemplated
by the consent granted. If the consent is not informed
or circumstances change such that consent is vitiated,
the waiver is not effective.
G. ETHICAL WALLS TO AVOID CONFLICTS
OF INTEREST
Devices employed to screen lawyers in separate
branches of publicly-funded law offices from one another
have been allowed for the representation of clients
with adverse interests.22 For example, a county counsel
office may represent both the public guardian in the
conservatorship proceeding and the county in a petition
to declare the conservatee’s child a ward of the court.23
However, while such walls may be accepted in cases
of successive representation or in very large offices,
they are fraught with danger in cases of simultaneous
adverse representation as to the same matter and could
be deemed a violation of Rule 3-310, especially where
the conflict arises from the prior private clients of the
city attorney.24
CHAPTER 2: CONFLICTS OF INTERESTS
CHAPTER 2 ENDNOTES
15 DeGrassi v. City of Glendora, 207 F.3d, 636, 642 (9th Cir. 2000).
1
Flatt v. Superior Court (Daniel), 9 Cal.4th 275, 284-287 (1994).
2
Id. at 283-284. But see also Kirk v. First American Title Insurance
Company, 183 Cal.App.4th 776 (1910) [rejecting blanket rule of
vicarious disqualification in the private context].
16 City of Huntington Beach v. The Petersen Law Firm, 95 Cal.App.4th
562, 566-567 (2002).
3
In re Lee G., 1 Cal.App.4th 17, 29 (1991).
4
Id. at 28, quoting Castro v. Los Angeles County Bd. of Supervisors,
232 Cal.App.3d 1432, 1444 (1991).
5
People v. Christian, 41 Cal.App.4th 986, 997-98 (1996) [permitting
lawyers from two separate branch offices of the public defender,
screened off from one another, to represent criminal co-defendants
with adverse interests]. “Thus, in the public sector, in light of the
somewhat lessened potential for conflicts of interest and the
public price paid for disqualifying whole offices of government
funded attorneys, use of internal screening procedures or “ethical
walls” to avoid conflicts within government offices…have been
permitted.” Id. at 998. Also see City and County of San Francisco v.
Cobra Solutions 38 Cal.4th 839 (2006) and City of Santa Barbara v.
Superior Court, 1122 Cal.App.4th 17 (2004).
6
Sabey v. City of Pomona, 215 Cal.App.4th 489 (2013).
7
Ward v. Superior Court, 70 Cal.App.3d 23, 35 (1977).
8
State Bar of Cal. Standing Comm. on Prof’l Responsibility and
Conduct, Formal Op. 2001-156, WL 34029610; see also chapter 1.
9
Civil Service Commission v. Superior Court, 163 Cal.App.3d 70
(1984), in which the county counsel was disqualified under Rule
3-310 from representing a board of supervisors in a suit against
a county civil service commission. The suit challenged the
commission’s action in reversing a discharge and county counsel
had advised the commission about the same matter. The major
rationale for the court in concluding that there was more than one
client represented by the county counsel was the fact that the
quasi-independent board’s decision was binding and could not be
overruled by the board of supervisors. Since the county counsel
had already advised the commission, he had to withdraw from
representing the board of supervisors against the commission that
he had advised as to the same matter. The court relied on People
ex. rel Deukmejian v. Brown, 29 Cal.3d 150 (1981). There, Rule 3-310
prohibited the attorney general from suing a client department in a
matter on which he advised that department. 80 Ops. Cal. Atty. Gen.
127 (1997) (Opinion No. 96-901) [when a county counsel takes a
position in favor of the interests of the county board of supervisors
and adverse to the interests of an independently elected
sheriff, a conflict of interest may, depending upon the individual
circumstances, thereafter exist so as to entitle the sheriff to legal
representation in that matter by independent counsel].
17 California Government Code section 825.2(a).
18 California Government Code section 825.2(b). Stuart v. City of
Pismo Beach, 35 Cal.App.4th 1600, 1607 (1995) [city could refuse
to continue providing a defense to a police officer who was
cooperating with the opposing party because such cooperation
created a conflict of interest between the city and the officer].
19 Laws v. County of San Diego, 219 Cal.App.3d 189, 198-200 (1990).
There is no conflict because city councils cannot agree in advance
to indemnify officials and employees for punitive damages. See
id. at 198 [contrasting the authority of public entities to make
discretionary decisions after judgment is rendered to pay punitive
damages awards with the public policy against the issuance of
liability insurance against punitive damages].
20 DeGrassi v. Glendora, 207 F.3d 636, 642-643 (9th Cir. 1999).
21 San Diego Navy Federal Credit Union v. Cumis Ins. Society, 162
Cal.App.3d 358, 375 (1984); See also Laws v. County of San Diego,
(1990) 219 Cal.App.3d 189 (1990); California Government Code
section 825.
22 See cases discussed in People v. Christian, 41 Cal.App.4th 986, 993995 (1996). Screening devices used to avoid conflicts of interest
should be distinguished from similar arrangements used to avoid
due process violations that would otherwise arise from the same
attorney or attorneys simultaneously performing advocacy and
advisory functions in administrative proceedings. Howitt v. Superior
Court (County of Imperial), 3 Cal.App.4th, 1575, 1586-1587 (1992)
(screening measures within county office avoided due process
violation); but see also Sabey v. City of Pomona, 215 Cal.App.4th
489, 497-498 (2013) [screening measures did not avoid due process
violation where attorneys representing city in advocacy and
advisory functions were partners from the same private law firm].
23 In re Lee G., 1 Cal.App.4th 17 (1991).
24 City and County of San Francisco v. Cobra Solutions, Inc., 8
Cal.4th 839, 853-854 (2006) [city attorney’s prior representation
of corporation later sued by the city for fraud required vicarious
disqualification of the entire city attorney office because as a head
of a government law office, the city attorney was the position of
both making policy decisions and overseeing the attorneys who
served under him such that both the city and the corporation could
question the city attorney’s confidentiality and loyalty].
10 Elliott v. McFarland Unified School District, 165 Cal.App.3d 562, 571
(1985).
11 California Government Code section 825 et seq.
12 This provision has been held to apply to actions under 42 U.S.C. §
1983 (Williams v. Horvath, 16 Cal.3d 834, 843 (1976)).
13 California Government Code section 996.
14 California Government Code section 825 (emphasis added). Stuart
v. City of Pismo Beach, 35 Cal.App.4th 1600, 1607 (1995) [city could
refuse to continue providing a defense to a police officer who was
cooperating with the opposing party because such cooperation
created a conflict of interest between the city and the officer].
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
CHAPTER 3:
THE POLITICAL REFORM ACT: ETHICAL CONSIDERATIONS FOR THE CITY ATTORNEY
A.INTRODUCTION
The Political Reform Act (PRA), adopted by the voters in
1974, governs disclosure of political campaign contributions
and spending by candidates and ballot measure
committees; it also creates ethical rules for state and local
government officials that impose limits on certain actions
they may take that affect the official’s financial interests.
The Fair Political Practices Commission (FPPC) was created
by the PRA to oversee and implement its provisions. The
PRA is set forth in Government Code sections 81000 et seq.,
and the FPPC’s implementing regulations are located in the
California Code of Regulations (CCR), at Title 2, Division 6,
sections 18110-18997.1
City attorneys are public officials subject to the PRA.
However, there are some aspects of the PRA that apply
differently to city attorneys than to other public officials.
Also, some aspects of the PRA apply differently to contract
city attorneys than to in-house city attorneys. These
differences are the focus of this chapter. Because city
attorneys routinely need to apply and interpret the PRA for
their clients, they should already have a basic knowledge
of the PRA and the Regulations. As a result, this chapter
will presume a general understanding of the PRA and the
guidance set forth in Regulation 18700 used to analyze
potential financial conflicts.2
Distinct from the PRA, Government Code Section 1090
prohibits public officials from making or participating in the
making of contracts in which they have a financial interest;
it also must be considered when analyzing possible financial
conflicts of interest. See chapter 4 for a full discussion of
Government Code Section 1090 issues.
B. THE POLITICAL REFORM ACT APPLIES TO BOTH
IN-HOUSE AND CONTRACT CITY ATTORNEYS
The PRA defines “public officials” as every member, officer,
employee, or consultant of a state or local government
agency.3 Therefore, an individual serving as city attorney (or
assistant city attorney) in an in-house capacity is a public
official. Similarly, an individual serving a city by contract with
the power to make governmental decisions or providing
services normally provided by a city staff member is a
“consultant” and, thus, also a public official.4 As a result, city
attorneys are public officials covered by the PRA whether
they work for the city in-house or pursuant to a contract.
Practice Tip:
Both in-house and contract city attorneys and
assistant city attorneys are required to file an annual
California Form 700 Statement of Economic Interests
pursuant to Government Code section 87200.
C. DECISIONS AFFECTING THE CITY ATTORNEY’S
COMPENSATION OR PAYMENTS TO THE CITY
ATTORNEY’S LAW FIRM
The basic rule regarding conflict of interests under the
PRA is that a public official may not make, participate in
making, or in any way use or attempt to use his or her
official position to influence a governmental decision
when he or she knows (or has reason to know) that he or
she has a disqualifying financial interest. A public official
has a disqualifying financial interest if the decision will
have a reasonably foreseeable material financial effect,
distinguishable from the effect on the public generally,
directly on the official, or his or her immediate family, or on
any financial interest described in the regulations.5
Although “financial interest” generally includes any source
of income to the official within twelve months before the
decision is made, the PRA specifically provides that salary
received from a local government agency is not considered
income for purposes of the PRA.6 Regulation 17232 defines
salary from a government agency as follows:
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CHAPTER 3: THE POLITICAL REFORM ACT
“‘Salary’ from a state, local, or federal government agency
means any and all payments made by a government agency
to a public official, or accrued to the benefit of a public
official, as consideration for the public official’s services
to the government agency. Such payments include wages,
fees paid to public officials as “consultants” as defined in
California Code of Regulations, Title 2, section 18701(a)
(2), pension benefits, health and other insurance coverage,
rights to compensated vacation and leave time, free or
discounted transportation, payment or indemnification of
legal defense costs, and similar benefits.”7
Therefore, a salary from the city, paid directly to either inhouse or contract city attorneys, is not defined as income
under the PRA, and does not constitute a disqualifying
financial interest.
Contract city attorneys typically do not receive
compensation directly from the city. Rather, they receive
compensation from and/or have an ownership interest in
the law firm that is paid by the city for their services. Thus,
contract city attorneys will likely have a financial interest
in decisions affecting their compensation because the city
will generally compensate their firm – and not the individual
contract city attorney – for these services.
Regulations 18702 through 18702.4 defines “Making,
Participating in Making and Using or Attempting to Use
Official Position to Influence a Government Decision.”
Regulation 18702.4(a)(3) specifically provides that “Making
or participating in making a governmental decision shall
not include:
(b) Notwithstanding Title 2, California Code of
Regulations, section 18702.3(a), an official is not
attempting to use his or her official position to
influence a governmental decision of an agency
covered by that subsection if the official:
(3) Negotiates his or her compensation or the terms
and conditions of his or her employment or contract.
The FPPC’s Leidigh Advice Letter applied the predecessor
to these Regulations to city attorney contracts.8 The advice
letter indicates that an attorney employed by a law firm
where the firm has a contract with a government agency
to provide services may negotiate changes in, a renewal
of, or extension of, his or her firm’s contract with that
agency, or negotiate a separate contract for his or her law
firm, provided that the attorney does so while acting in the
attorney’s private capacity.9 The FPPC concluded that such
actions were within the scope of both of the consultant
contract exceptions (the “participation” exception to
Regulation section 18702.4(a)(3) and the “using his or
her official position to influence” exception to Regulation
section 18702.4(b)(3)).
Contract city attorneys are frequently requested to render
advice to their clients on matters that could result in
generating additional work for the city attorney or other
members of his or her office. Rendering such advice does
not usually implicate the PRA for in-house city attorneys
because their compensation will generally not be affected
by the amount of work they or their offices perform.
...
(3) Actions by public officials relating to their
compensation or the terms or conditions of their
employment or contract. In the case of public officials
who are “consultants,” as defined in Title 2, California
Code of Regulations, section 18701(a)(2), this includes
actions by consultants relating to the terms or
conditions of the contract pursuant to which they
provide services to the agency, so long as they are
acting in their private capacity.
A similar exception is provided to the prohibitions on
attempting to influence a decision. Regulation 18702.4(b)(3)
which provides in relevant part:
...
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
However, the compensation of contract city attorneys and
their law firms frequently depends on the amount of work
attorneys in the firm perform for the city. For example, the
city attorney’s firm might receive additional compensation
depending on whether the city attorney’s office files
or defends a lawsuit on behalf of the city. It would be
untenable if the PRA prevented a contract city attorney from
participating in such decisions in his or her official capacity.
The FPPC avoided this result by providing that contract city
attorneys and other consultants can participate in and use
their official position to influence decisions that could result
in additional compensation to them or their firm so long
as the contract with the city already specifically includes
such services.10 The FPPC reasoned that the governmental
decision to pay the law firm for the legal services
enumerated in the contract had already been made by
disinterested agency officials at the time the contract was
approved. The city attorney’s participation in a decision that
could trigger these services merely involved implementation
of that preexisting decision.
Practice Tip:
Contract city attorneys should make certain that
their contracts contain provisions to provide
specialized services prior to providing advice that
might lead to a need for such services. Otherwise, the
attorney’s performance of those services after having
participated in the underlying decision necessitating
the services could result in a violation of the PRA. This
area can become tricky if the decision on amending
the city attorney’s contract and the underlying
decision become intertwined.
City attorneys frequently are requested to participate
in decisions involving general benefits or compensation
that could indirectly affect their own compensation. For
example, a city attorney might be requested to advise the
city on an issue relating to the CalPERS retirement benefit
formula, which would affect his or her retirement benefits.
Government Code section 82030(b)(2) and Regulations
18232 and 18702.4, discussed above, may apply to these
decisions for in-house city attorneys, allowing them to
provide advice, even though it could indirectly affect their
compensation. This result is not certain; there is no guidance
on the issue.
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In the case of contract city attorneys, if the firm’s
compensation is not linked in any way to the benefits being
discussed, he or she could advise the city because the
decision would not impact the firm’s compensation. If it
were linked, Regulation 18702.4 would not permit the city
attorney to provide advice because he or she would not
be acting in a private capacity relating to the terms of their
firm’s compensation, as required by the Regulations. See
Chapter 4 for a discussion of the application of Government
Code Section 1090 to this issue.
Practice Tip:
Independent from PRA considerations, neither contract
nor in-house city attorneys should attend a closed
session at which their compensation is discussed.
Government Code section 54957.6 (the meet and
confer Brown Act closed session provision) provides
the only authority to discuss the city attorney’s salary
in closed session. That section, however, does not
authorize the affected employee to attend the closed
session. Both contract and in- house city attorneys
would violate these Brown Act provisions by attending
a closed session during which their (or their firm’s)
compensation is discussed.11
D. DECISIONS AFFECTING OTHER CLIENTS OF
THE CITY ATTORNEY
City attorneys will sometimes be requested to participate in
decisions affecting another client of the city attorney. This
situation arises more commonly for contract city attorneys,
who often represent clients in addition to the city. Under
the PRA, there may be a disqualifying economic interest
depending on whether the other client is a source of income
to the city attorney.12
In-house city attorneys can also sometimes face such an
issue. For example, in-house city attorneys might be called
on to represent another entity, such as a joint powers
authority, to which the city belongs.
CHAPTER 3: THE POLITICAL REFORM ACT
The PRA would not be implicated for in-house city attorneys
so long as the other client is a public entity because the
salary the city attorney receives from that entity is not
income under the PRA. Additionally, the PRA would not apply
to this situation for either in-house or contract city attorneys
if the individual is not compensated by the joint powers
authority for providing services to the authority. Keep in
mind that the Rules of Professional Conduct apply, and client
waivers may be needed. (See chapter 2.)
The situation is a little more complicated for contract
city attorneys who work for firms if the other entity
compensates the attorney or the firm. Government Code
Section 82030 provides that sources of income to a public
official owning 10% or more of a business entity include
sources of income to the business entity if the public
official’s pro-rata share of income from that source exceeds
$500. As a result, city attorneys owning more than 10%
of a law firm will not be able to participate under the PRA
in decisions affecting other clients of the firm, if the city
attorney’s pro-rata share of the income from that other
client exceeds $500.13
However, sources of income to the firm will not be sources
of income to city attorneys owning less than 10% of the
law firm. In such cases, the PRA would require the city
attorney to abstain from participating in decisions affecting
the other client only if it is reasonably foreseeable the
decision would have a material financial effect on the law
firm. So long as the firm will not perform work for the client
that would flow from the decision, it is unlikely that the
PRA would be implicated.
CHAPTER 3 ENDNOTES
1 All further references in this chapter to “Regulations” refer to the
California Code of Regulations, Title 2, Division 6, sections 1810918997.
2 In 1998 the FPPC adopted an “eight-step” standard analysis for
conflict of interest issues, which was set forth in Regulation 18700.
On April 25, 2013, the FPPC adopted an amendment to Regulation
18700 that eliminates the eight-step test and creates a more
streamlined analysis. The effective date of the amendment has been
delayed; it will become effective at the same time as other proposed
regulatory amendments which are part of the FPPC’s conflict of
interest improvement project. As of this writing the amendment is
not yet effective.
3 California Government Code section 82048.
4 California Code of Regulations section 18701(a)(2).
5 California Code of Regulations section 18700(a) (as amended).
6 Government Code section 82030(b)(2).
7 California Code of Regulations section 18232.
8 Leidigh Advice Letter, A-94-127 (1994).
9 The Eckis Advice Letter, A-93-270 (1993), which determined that contract
city attorneys could not negotiate or renegotiate their contracts, was
decided under different regulations and is no longer valid.
10 Ritchie Advice Letter, A-79-045 (March 19, 1979). This advice letter
addresses the issue whether a contract city attorney can participate
in a rezoning decision that would likely lead to a redevelopment
agency bond sale from which the city attorney would receive a
percentage commission as bond counsel. Although the advice
letter did not reach the ultimate issue, it does indicate that the
bond counsel payments, even if paid as a percentage of the bond
proceeds, are considered salary from a government agency and,
thus, are excluded from income under the PRA. The implication of
the advice letter is that the city attorney could participate in the
rezoning decision. In this case, the attorney was a sole practitioner.
McEwen Informal Assistance Letter, I-92-481, I-92-523 and I-92-G14.
This informal advice letter contains a comprehensive analysis of
the PRA as applied to city attorneys. For purposes of this chapter,
the relevant determination is that a city attorney can participate
in decisions that could result in additional compensation from the
city to the firm if the services for which the extra compensation will
be earned are included in the contract. Some of the Regulations
discussed in this informal advice letter have changed. For example,
the portion of the letter prohibiting a contract city attorney from
renegotiating the contract between the city and the city attorney’s
firm, even in his or her private capacity, is no longer valid. Thus, the
analysis in this letter should be reviewed carefully.
11 California Code of Regulations section 18702.1(c)
12 Mosely Advice Letter, A-01-161 (2001). This advice letter analyzes
whether a contract city attorney may represent a city in a contract
dispute with the retired police chief even though the attorney’s law
firm had also provided legal services to the police chief in past years.
In this particular case, no conflict was found since the firm had not
provided any legal services to the police chief in the 12 months prior
to the dispute. Therefore, since the firm did not have a disqualifying
economic interest, the attorney could represent the city in the
matter.
13 McEwen Advice Letter, A-89-454.
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CHAPTER 4
CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS: CONFLICTS OF INTEREST UNDER
GOVERNMENT CODE SECTION 1090
A.INTRODUCTION
Government Code section 1090 generally prohibits public
officials from making or participating in the making of
contracts in which they have a financial interest.1 This
statute codifies the common law prohibition against
self-dealing with respect to contracts entered into by
government agencies. Public officials must comply with the
requirements of both section 1090 and the Political Reform
Act (see Chapter 3).
In contrast to the Political Reform Act, which has been
interpreted in comprehensive administrative regulations
and both formal and informal advice letters promulgated
by the Fair Political Practices Commission, Section 1090
has in the past been interpreted and applied only through
appellate court decisions and Attorney General opinions.
Effective January 1, 2014, however, the Fair Political
Practices Commission was given authority to issue
opinions and advice regarding prospective compliance
with Section 1090.2
In light of the general and sometimes ambiguous statutory
language, the task of analyzing Section 1090 issues
and reaching definitive conclusions can be particularly
challenging. This difficulty, combined with the especially
severe penalties for violations, militates in favor of
interpreting Section 1090 very conservatively. This chapter
focuses on potential conflicts of interest under Section 1090
that are of particular concern to all city attorneys and some
special counsel.
B. GOVERNMENT CODE SECTION 1090 AND CITY
ATTORNEYS GENERALLY
1. Elements of a Section 1090 Violation.
Section 1090 prohibits “city officers or employees” from
being “financially interested in any contract made by them
in their official capacity.” The essential elements of a Section
1090 violation are:
»» a city officer or employee
»» acting in an official, rather than private, capacity
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»» who participates in the making
»» of a contract entered into by the city
»» in which the official has a direct or indirect financial
interest
a. City Officer or Employee.
A city attorney holds a public office, and therefore is a “city
officer” within the meaning of section 1090, regardless
of the individual’s status as an employee or independent
contractor.3 That much is clear. It is less clear whether
Section 1090 also applies to lawyers serving as special
counsel to a city if they are in a position to influence the
decision to enter into a contract in which they have a direct
or indirect financial interest.
In the early case of Shaefer v. Berinstein, the court held that
an attorney retained as special counsel to handle certain
real property matters was a city officer subject to section
1090.4 The attorney was hired to rehabilitate properties
burdened by tax deeds and special assessments. The court
held that he was acting as an officer of the city within the
meaning of section 1090 when he advised the city council
to sell certain the properties, which he then fraudulently
purchased through dummy entities. Similarly, in California
Housing Finance Agency v. Hanover, the court held that an
outside attorney who was in a position of influence over a
public agency’s contracting decisions was an “employee”
within the meaning of Section 1090, even if he would be
classified as an independent contractor under common
law principles.5 In the recent case of People v. Christiansen,
however, the court expressly declined to follow this holding
of the CHFA case and instead concluded that a criminal
prosecution could not be brought under section 1090
against a school district consultant who did not meet the
common law definition of an “employee.”6 Pursuant to
an independent contractor agreement with the school
district, the consultant prepared a facilities master plan and
recommended that construction projects be funded by a
bond measure, while her company was to be paid for project
management duties from the bond proceeds.
CHAPTER 4: CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS
Before Christiansen, it was likely that special counsel would
be treated as employees or public officials covered by
Section 1090, even if they were retained as independent
contractors. After Christiansen, the result is far less clear.
Because of this legal uncertainty, special counsel should
carefully consider the risks under Section 1090 when
advising client agencies on contracts in which counsel may
have a direct or indirect financial interest.
b. Acting in an Official Capacity.
Section 1090 prohibits city officials from having a
financial interest in contracts made by them “in their
official capacity.” It does not prevent them from entering
into contracts made in their private capacity. This
distinction is fact-dependent, and there is no bright line
test for determining whether an official is acting in a
private capacity.
In Campagna v. Sanger, a law firm provided contract city
attorney services under an agreement providing a monthly
retainer. The retainer excluded litigation, but the agreement
provided that the firm would be paid reasonable fees for
litigation, depending upon the type of services provided.7
An attorney with the firm negotiated a legal services
contract with the City providing that his firm and another
law firm would represent the city in prosecuting a toxic
contamination lawsuit against chemical companies. The
contingency fee agreement approved by the city council
set forth how the total fee would be calculated, but did
not explain how the two firms would split the fee. Under a
separate oral agreement with the second law firm, the city
attorney’s firm was to receive a certain percentage of the
total contingency fee.
The court held that the city attorney did not violate
Section 1090 when he negotiated with the city on his
firm’s behalf in his private capacity to provide additional
legal services beyond the basic retainer agreement.
However, the contingency fee agreement did not establish
how the firm would be paid for this additional work; that
was determined in the separate referral fee agreement
between the city attorney’s firm and the second firm.
The attorney admitted and the court found that when
negotiating this second agreement, he was acting within
the course and scope of his official duties as the city
attorney. Because he was financially interested in a
contract made in his official capacity, a violation of Section
1090 had occurred; and the referral fee agreement was
unenforceable. The court’s discussion of the contingency
fee agreement is confusing due to the unique facts
presented in this case; however, the court did clearly hold
that a city attorney can negotiate his or her contract with
the city when acting in a private capacity.
In People v. Gnass,8 a city attorney was a partner in a private
law firm hired to provide part-time, contract city attorney
services to the City of Waterford. Waterford formed a Public
Financing Authority through a joint powers agreement
with its redevelopment agency. The city attorney was
criminally prosecuted for representing the Waterford PFA in
connection with the formation of several other PFA’s under
the Marks-Roos Local Bond Pooling Act, then receiving
compensation for serving as disclosure counsel for revenue
bond issuances of the other PFA’s. The court held that the
city attorney was acting in his official capacity when he
advised the Waterford PFA with regard to formation of the
other PFA’s, in which he had a prohibited financial interest.
c. Making a Contract.
The courts and the Attorney General have read section
1090 broadly so that the “making of a contract” includes
actions preliminary to approval and execution. This includes
involvement in early discussions about the need for the
contract, as well as negotiations of contract terms. The
prohibition of section 1090 applies when a public official has
the opportunity to exert influence over decisions leading to
a contract, even if the official does not personally participate
in the actual approval or execution of the contract.9
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Practice Tip:
Try to identify potential Section 1090 conflicts as
early as possible and refrain from any involvement in
discussions that may lead to a prohibited contract. It
will usually be impossible to “unring the bell” after you
have participated in preliminary decision-making, with
the possible result that the contract cannot be entered
into at all.
d. Financial Interest.
The courts and the Attorney General have broadly
interpreted the term “financial interest” to include both
direct and indirect financial interests in a contract.10 In the
Gnass case, discussed above, the court found an indirect
financial interest when a city attorney, acting in his official
capacity, provided advice to a financing JPA regarding the
formation of several other JPAs, then reaped a financial
reward by serving as disclosure counsel for bonds issued
by the other JPAs. This case it troubling because it suggests
that a contract which creates a mere possibility of future
paid legal work can constitute an indirect financial interest.
The Attorney General has opined that a city council cannot
enter into a contract with a law firm, of which a city council
member is a partner, to represent the city in a lawsuit, even
if the law firm would receive no fees for its services and
would agree to turn over to the city any attorney fees that
might be awarded in the litigation. The Attorney General
pointed to the potential divergence of interests between the
law firm and the city because the costs incurred by the firm
in pursuing the litigation might give it an incentive to settle,
as well as the potential for indirect economic gain to the
firm through the marketing value of a successful outcome.11
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In Frasor-Yamor Agency, Inc. v. County of Del Norte, the court
found a financial interest arising out of a county supervisor’s
status as an employee and part owner of an insurance
brokerage which placed insurance policies in its capacity
as an agent for the county, even though the supervisor had
agreed with his firm to share in none of the commission
income attributable to the insurance policies. In reaching
this conclusion, the court relied on the potential impact of
the overall financial success of the company on the value
of the supervisor’s ownership interest. Additionally, the
company could potentially receive additional remuneration
in the form of profit-sharing, over and above ordinary
commissions, based on the overall volume of business it
produced.12
The Attorney General is in the process of responding to a
request from the Riverside County District Attorney for an
opinion on the question of whether a private attorney acting
as a contract city attorney may also act as bond counsel
for the same city and be paid based on a percentage of the
bond issues.13 In this type of arrangement, the bond counsel
receives no fee unless the bonds are issued. The District
Attorney took the position that a city attorney may not
provide advice on the issuance and amount of bonds and in
what amounts because the attorney has a financial interest
arising from the additional income that will be realized from
the bond issuance.
City attorneys should also be aware that financial interests
may arise from the employment or business activities of their
spouse. Both the financial interests and exceptions applicable
to the spouse will be imputed to the city attorney.14
CHAPTER 4: CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS
2. Exceptions: Non-Interests and Remote
Interests.
a.Non-interests.
Section 1091.5 provides that a public official is deemed
not to have a financial interest in a contract and may
fully participate in its formation if his or her interest falls
within certain listed categories. Of particular interest to
city attorneys are Subdivisions (a)(9) and (a)(10) of Section
1091.5. Subdivision (a)(9) is commonly referred to as the
“governmental salary exception”. Under this provision, a
public official is deemed to have a non-interest in a contract
when the official’s interest is “that of a person receiving
salary, per diem, or reimbursement for expenses from a
government entity, unless the contract directly involves
the department of the government entity that employs the
officer or employee, provided that the interest is disclosed
to the body or board at the time of consideration of the
contract, and provided further that the interest is noted
in its official record.” Subdivision (a)(10) provides that a
public official who also serves as an attorney for a party
contracting with the public agency has a non-interest in
a contract if the attorney has not received and will not
receive any remuneration as a result of the contract and
has an ownership interest of less than 10% in the law
practice or firm.
The exception contained in Subdivision (a)(9) was
interpreted in the recent case of Lexin v. Superior Court.15
Lexin involved a felony prosecution of several city
employees who also served on the board of the city’s
municipal retirement system. The board of the retirement
system, a separate legal entity from the city, voted to
authorize an agreement which allowed the city to defer
payments into the retirement fund in exchange for the city’s
agreement to provide increased pension benefits for city
employees, including the defendants. For most employees,
the increased benefit consisted of an enhanced multiplier
for calculating retirement benefits. The contract also created
a special benefit for one board member who served as a
union president, allowing him to use a higher salary for his
retirement calculations.
The Lexin court had no difficulty concluding that the board
members had participated in the making of a contract in
which they had a financial interest. After an exhaustive
analysis, the court concluded that Section 1091.5(a)(9)
provides an exception to the prohibition of Section 1090
for an individual whose financial interest in a proposed
contract is only the present interest in an existing
employment relationship with a public agency which is a
party to the contract, provided that the contract does not
directly affect the individual’s own department. However,
this exception does not apply when the contract effects
prospective changes in the pension benefits or other
elements of government compensation provided to the
interested officials.
The court ultimately concluded that the board members
did qualify for the “public services” exception under Section
1091.5(a)(3), which states that a non-interest exists when
a member of a public body or board is a recipient of public
services on the same conditions as if he or she were
not a board member. In Lexin, board members’ financial
interest arose because of their role as constituents of the
retirement board and recipients of the public services
it provided. There was no conflict, the court reasoned,
because the pension benefits were broadly available to
all others similarly situated, rather than narrowly tailored
to favor a particular employee or group of employees. It is
noteworthy that in reaching this interpretation, the court
relied on legal authorities interpreting the “public generally”
exception in the Political Reform Act. However, this defense
was not available to the board member who received a
special benefit.
Similarly, in People v. Rizzo, the governmental salary
exception was held inapplicable to a city manager and
assistant city manager who participated in modifying
the city’s supplemental retirement plan to provide
themselves with unique benefits not made available to
other plan members.16
b. Remote Interests.
Government Code section 1091 provides that a public board
may approve a contract in which one of its members has
only a “remote interest,” provided that the interested official
discloses his or her financial interest, has it noted in the
board’s official records, and refrains from participating in the
decision-making process leading to contract formation.
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Section 1091(b)(13) applies to the interest “of a person
receiving salary, per diem, or reimbursement for expenses
from a government entity.” The Attorney General has
interpreted the term “salary” as including other elements
of compensation such as retiree health benefits. But
the Attorney General also concluded that this provision
encompasses only a public official’s employment with
another government agency seeking to contract with the
agency the interested official serves. Hence it does not
apply when a community college district board member
receives retirement health benefits directly from the district
as a former faculty member under a collective bargaining
agreement and the district is renegotiating the amount
of health benefits with employee representatives.17 In
contrast, it does permit a city council to contract with a
sheriff’s office for law enforcement services, as long as a
council member who was also a deputy sheriff refrains from
participation in the making of the contract.18 When Section
1091(b)(13) is read in conjunction with the non-interest
provision contained in Section 1091.5(a)(9), it appears that
a member of a public agency board has a non-interest
in salary and benefits received from employment with a
different public agency, as long as the contract in question
does not directly involve the department of the agency that
employs the official. In this situation, the public official may
participate in contract approval. Even if the contract affects
the department employing the official, it may be approved
without the official’s participation under the remote interest
exception contained in Section 1091(b)(13).19
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Section 1091 makes one remote interest specifically
applicable to attorneys and certain other occupations; this
remote interest dovetails with the non-interest set forth
in Section 1091.5(a)(10). Section 1091(b)(6) encompasses
the interest of an attorney of a contracting party, if the
attorney has not received and will not receive remuneration
as a result of the contract and has an ownership interest
of 10 percent or more in the law practice or firm. Prior to
the addition of the 10% ownership provision, the Attorney
General found that a city council member had only a remote
interest in the client of a law firm in which his spouse was a
partner because the law firm would receive no remuneration
from the contract since the firm’s representation of the
client concerned matters unrelated to the contract with
the city.20 Although this issue has not yet been addressed
by the courts or the Attorney General, it seems reasonable
to conclude that the references to receipt of remuneration
under a contract found in Section 1091(b)(6) and Section
1091.5(a)(10) do not prevent a city attorney from being paid
by the city for drafting the contract itself, as long as the city
attorney is not going to receive remuneration from the other
party to the contract in the future as a result of the contract.
3. Rule of Necessity.
In limited circumstances, a public official or board may be
permitted to carry out essential duties despite a conflict
of interest when the official or board is the only one who
may legally act. For example, a school superintendent may
enter into a memorandum of understanding with school
employees, even though he was married to a school
employee, because he was the only official authorized to
approve the MOU.21 Similarly, a community college board
was allowed to negotiate health benefits with its faculty,
even when a board member was a retired faculty member
whose retirement health benefits would be affected
because only the board is legally authorized to act on this
decision.22 It is unlikely that there will be many situations
where the rule of necessity might apply to a city attorney.
One possible scenario might be where a city charter
provision expressly requires approval of a particular contract
by the city attorney.
CHAPTER 4: CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS
4. Penalties for Violations.
Any contract made in violation of Section 1090 is void
and unenforceable even if the city official acted pursuant
to legal advice from the city attorney, the violation
was unintentional, and the contract was not unfair or
fraudulent.23 The city, or any other party except the
financially interested official, may seek nullification of a
contract made in violation of section 1090, as well as the
interested city official’s disgorgement of profits and payment
of restitution.24 Actions to void contracts under Section 1090
must be commenced within four years after the plaintiff
has discovered, or in the exercise of reasonable care
should have discovered, the violation.25 A public official who
knowingly and willfully makes a contract in which he has a
financial interest can be punished by fines, imprisonment,
and disqualification from holding any public office.26 Effective
January 1, 2014, the Fair Political Practices Commission was
given authority to bring administrative or civil actions to
enforce Section 1090 after obtaining authorization from the
District Attorney, resulting in possible fines of up to $10,000
or three times the financial benefit received by a defendant
for each violation.27
Practice Tip:
If it is not clear whether a particular contract will
give rise to a section 1090 violation affecting the city
attorney, it is advisable for the city attorney to abstain
from any participation. This approach will minimize the
risk of a successful criminal prosecution because the
element of “making” a contract would be absent.
C. IDENTIFYING AND ANALYZING POTENTIAL
CONFLICTS OF INTEREST UNDER SECTION 1090
Several common circumstances in which city attorneys may
encounter potential Section 1090 conflicts are:
»» Negotiating new or amended employment contracts
»» Contracts with other clients of the city attorney’s
law firm
»» Serving as legal counsel to a joint powers agency of
which the city is a member
1. Negotiating City Attorney Employment
Contracts
Section 1090 does not prohibit contract city attorneys from
negotiating the terms of their employment contracts directly
with the city so long as they are acting solely in their private
capacity.28 The Attorney General has acknowledged that a
public employee’s contract may be renegotiated, “so long
as the employee totally disqualifies himself or herself from
any participation, in his or her public capacity, in the making
of the contract.”29 Nevertheless, the Attorney General also
stated that “when a contractor serves as a public official
(e.g., a city attorney) and renegotiates a contract, this
office recommends that such contractors retain another
individual to conduct all negotiations. In so doing, the official
would minimize the possibility of a misunderstanding
about whether the contractor’s statements were made
in the performance of the contractor’s public duties or in
the course of the contractual negotiations.”30 Although
this passage is not supported by references to legal
authority, the Attorney General’s recommendation merits
consideration because the retention of legal counsel to
conduct contract negotiations could provide additional
factual support for the conclusion that the city attorney is
truly acting in his or her private capacity.
Practice Tips:
When negotiating your employment contract or
amendments thereto, notify the city council in writing
that you are representing yourself in your personal
capacity and not advising them in your official capacity
as the city attorney. Any letter or memorandum
providing this notification should be on personal or law
firm letterhead.
with the city
»» Representing the city in negotiations with employee
groups for salary or benefit changes that may also
apply to the in-house city attorney.
»» Negotiating for the performance of additional
services outside the scope of an existing legal
services agreement with the city attorney’s law firm
Consider establishing further separation between your
official service as the city attorney and representation of
your personal financial interests in the contract negotiations.
Options include presenting your proposal to the city
manager or human resources director and allowing that
individual to present it to the city council, or even retaining
personal legal counsel as suggested by the Attorney General.
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Refrain from providing legal advice on the city’s negotiating
strategy or how contract provisions should be interpreted.
If asked to provide such advice, remind the city that you are
acting in your private capacity and recommend that the city
consult with independent counsel. If you are an in-house city
attorney, consider recommending that your city obtain legal
advice on your contract from outside counsel, rather than
from one of your subordinates.
2. Representing the City in Negotiating
Employee Benefit Changes that May Also Affect
an In-house City Attorney
An in-house city attorney may be called upon to provide
advice and representation for negotiations with employee
groups through the collective bargaining process. These
negotiations sometimes cover compensation and benefit
changes which can reasonably be expected to apply to
the city attorney, either through a “me too” clause in the
attorney’s employment agreement, through local custom
and practice, or otherwise. The Lexin and Rizzo cases hold
that although the government salary exception applies to
an interest in government compensation under an existing
employment relationship, contracts that may result in
future changes to that compensation do not qualify as noninterests under Section 1091.5. Moreover, even though the
remote interest exception under Section 1091(b)(13) states
that it applies to an interest “of a person receiving salary,
per diem, or reimbursement of expenses from a government
entity,” Lexin reasoned on the basis of legislative history
that it is inapplicable when the contract involves a direct
financial impact on the official.
This case presents a dilemma for a city attorney who is
expected to advise the city in the collective bargaining
process. The Section 1090 issue could be avoided if the
city attorney abstains from participation in the making of
a collective bargaining agreement when it is reasonably
foreseeable that the compensation changes reflected
in the agreement will be applied to the city attorney.
Another possible way to mitigate legal risk would be to
avoid including a “me too” clause in the city attorney’s
employment agreement.
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The Lexin case provides little useful guidance on these
important practical questions. Because of the lack of clarity
in this area of the law, city attorneys may wish to consider
seeking an opinion or advice from the Fair Political Practices
Commission before proceeding.
There may be factual situations where it is appropriate to
rely on the “rule of necessity” to allow participation in the
formation of contracts with employee groups, even though
the elements of a Section 1090 violation are present and no
exceptions apply. As discussed above, this rule authorizes
formation of a contract despite a conflict of interest when
necessary to ensure that essential governmental functions
are performed. The Lexin case suggested that the rule
of necessity could apply in appropriate circumstances to
permit city officials to negotiate contracts affecting their
personal salaries, but did not reach that issue.31
3. Negotiating to Provide Additional Legal
Services
a. In-house City Attorneys
City attorneys are often asked to perform litigation, bond
counsel and other specialized services. Such requests
normally do not present any questions under Section 1090
for in-house city attorneys because they usually will not
receive any additional compensation for performing such
services.
b. Contract City Attorneys
Whether a request for specialized legal services would
raise Section 1090 questions for contract city attorneys
depends on two factors: (1) will the city attorney’s contract
with the city require modification in order for the attorney
to be paid for these services; and (2) will the city attorney’s
involvement in the making of a contract between the
city and a third party generate additional income or
otherwise have a financial effect on the city attorney? The
last question is particularly important if there would be
additional income coming to the city attorney from an entity
other than the city.
CHAPTER 4: CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS
A contract city attorney who is advising the city on the
likelihood of success in litigation or on other matters that
could affect the city attorney’s income or that of his or her
law firm will not have a Section 1090 issue arising from the
additional income that could result from these services if the
retainer agreement already provides for such services. This
is because the provision of those services will not require
a new contract or an amendment to the existing contract.
Since no contract is involved, Section 1090 is not implicated.
However, if the contract does not include those services,
the city attorney will likely need to amend the contract.
Although city attorneys can represent themselves in such
negotiations, they may not recommend the need for such
services in their capacity as city attorney or advise the city
as a client with respect to the contract amendment.
There is no consensus legal opinion or direction on whether
a Section 1090 violation when providing advice on decisions
that might require additional services not already included
in the contract for which the city attorney could be selected
by the city. Such situations should be carefully evaluated on
a case-by-case basis. If the firm’s existing representation
of the city is on a limited basis as special counsel and the
city relies on its city attorney to advise it as to the wisdom
of participating in litigation, then a Section 1090 violation
would likely not occur. Under the Christiansen case, an
attorney hired as special counsel is not even subject to
Section 1090 as long as he or she meets the common law
definition of an independent contractor. However, care
should be exercised when relying on this case because it
conflicts with earlier case law.32
Practice Tip:
Contract city attorneys should include in their
retention agreements all services they anticipate
providing for the city and specify the basis for
determining the compensation for those services.
4. Contracts Between the City and Another
Client of City Attorney’s Law Firm
Cities sometimes wish to contract with other clients of the
city attorney. This situation is more common for contract
city attorneys, who may be members of firms with many
public and private clients. It can also arise for in-house city
attorneys who represent other government entities, such
as joint powers authorities, affiliated with the city. As long
as the city attorney avoids involvement in the “making” of a
particular contract, the city and the other client can contract
without violating Section 1090. There may be situations in
which the city attorney may lawfully work on the contract,
perhaps more in theory than practice. The city attorney can
participate in the making of the contract if the elements of
the Section 1091.5(a)(10) non-interest exemption are met
(city attorney will not receive remuneration as a result of
the contract and has an ownership interest of less than 10%
in the law practice or firm). The city attorney may, however,
have an indirect financial interest if his or her compensation
could increase as a result of the income the firm would
receive for representing the other client, or through
enhancement in the value of the partnership interest.33
If the city attorney’s other client is a public entity, then
potential Section 1090 issues must be addressed for that
entity as well if the attorney advising that client qualifies as
an “officer or employee” of that entity within the meaning of
Section 1090.
Practice Tip:
Even if you determine that you have no Section 1090
conflict, you still need to check the Rules and the
Political Reform Act for possible ethical or financial
conflicts.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
5. Serving as Legal Counsel to a Joint Powers
Authority
City attorneys are frequently asked to advise agencies
closely affiliated with the city itself, or to work on the
contract that will form a joint powers agency which includes
the city as a member. Section 1090 issues can arise when
the city attorney advises two legally distinct, but related
entities and receives compensation separate from the
compensation provided for services as city attorney/general
counsel. If faced with this situation, take a close look at
the Gnass case and make an assessment whether you are
facing an analogous fact pattern.
Be particularly wary of any situation in which you
or your firm will be paid by an entity that, directly
or indirectly, is “across the table” from the city in a
contract negotiation, even if the contract constitutes
only one aspect of a more complex transaction.
A more typical joint powers agreement advances policy
objectives shared by a number of public agencies. Often,
the “lead” city hosts the new agency by providing staffing
and facilities and is reimbursed by the authority for doing
so. If the city attorney is a public employee, the contract
forming the JPA usually does not present Section 1090
issues because the city attorney will not receive additional
compensation.
In the case of a contract city attorney, however, the issue
is more complex. A joint powers authority is created by
contract, and an attorney who expects to be considered as
general counsel for the new agency may be deemed to be
financially interested in that contract under the reasoning of
Gnass. Therefore, it may be prudent for the city attorney to
advise the city that he or she will either (1) not represent the
city in the formation of the authority or (2) not provide legal
services to the new authority after it is formed.
League of California Cities
1. Counsel and Council: A Guide for Building a
Productive Employment Relationship. This handbook
contains basic information about structuring the
employment relationship between the city attorney
and the city council. It also contains suggested
employment agreement provisions, including “scope
of services” for both contract and in-house city
attorneys. It can be downloaded from the League of
California Cities website:
»» http://www.cacities.org/Member-Engagement/
Professional-Departments/City-Attorneys/
Publications.aspx
Practice Tip:
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D. OTHER RESOURCES
•
www.cacities.org
2. Providing Conflict of Interest Advice (May 2008),
Chapter XII. Also available from the League of
California Cities website.
3. Conflicts of Interest (2010). Available from the
website of the Office of the California Attorney
General: www.oag.ca.gov
4. “When In Doubt, Sit It Out” – Gov. Code Section 1090
Update, presented by Steven Dorsey at the May 2011
City Attorneys Conference. Available from the League
of California Cities website.
CHAPTER 4: CITY ATTORNEYS’ FINANCIAL INTERESTS IN CONTRACTS
CHAPTER 4 ENDNOTES:
1 Section 1090 states:
“Members of the Legislature, state, county, district, judicial district,
and city officers or employees shall not be financially interested
in any contract made by them in their official capacity, or by
any body or board of which they are members. Nor shall state,
county, district, judicial district, and city officers or employees be
purchasers at any sale or vendors at any purchase made by them
in their official capacity. As used in this article, “district” means any
agency of the state formed pursuant to general law or special act,
for the local performance of governmental or proprietary functions
within limited boundaries.”
2 Government Code section 1097.1(c)(2), added by AB 1090, 2013
California Statutes, Chapter 650.
3 People ex rel. Clancy v. Superior Court, 39 Cal.3d 740, 747 (1985)
[main holding of case is that city cannot retain special counsel to
prosecute civil nuisance abatement cases via a contingency fee
agreement]; 70 Ops.Cal.Atty.Gen. 271, 273-274 (1987) (Opinion No.
87-905).
4 Shaefer v. Berinstein, 140 Cal.App.2d 278, 291 (1956); see also
companion case of Terry v. Bender, 143 Cal.App.2d 198, 206-207
(1956) [involving same nefarious scheme].
5 California Housing Finance Agency v. Hanover, 148 Cal.App.4th
682, 690-694 (2007); see also HUB City Solid Waste Services, Inc.
v. City of Compton, 186 Cal.App.4th 1114 (2010) [independent
contractor who managed the city’s in-house waste division was
acting as a public official within the meaning of Section 1090 when
he advised the city to enter into a franchise agreement with a
waste management company he created]; cf. Handler v. Board of
Supervisors, 39 Cal.2d 282, 286 (1952) [county charter provision
requiring appointment of officers or employees by ordinance held
inapplicable to attorney retained by contract to perform specialized
legal services on a temporary basis].
6 People v. Christiansen, 216 Cal.App.4th 1181 (2013); see generally
Klistoff v. Superior Court, 157 Cal.App.4th 469 (2007) [Section 1090
held inapplicable to private solid waste company and its principal
who exerted influence on city official to obtain refuse collection
and recycling contract because the private parties were not public
officers or employees].
14 e.g., Thorpe v. Long Beach Community College Dist., 83 Cal.App.4th
655 (2000) [community college district properly denied promotion
to employee whose spouse sat on the district board that had to
approve the appointment; non-interest exception provided in
Government Code section 1091.5(a)(6) for pre-existing employment
held inapplicable when an employee is appointed to a new
position]; 85 Ops.Cal.Atty.Gen. 34 (2002) [city employee may not
participate in negotiation of or drafting a development agreement
when her spouse is an employee of a firm that provides services
to the developer, even though he has no interest in the firm, he will
not work on this project, and his income will not be affected by the
negotiations or its outcome]; 81 Ops.Cal.Atty.Gen. 169 (1998) [city
council could not execute a contract for purchase of equipment
with a corporation because city council member and her spouse
owned stock in corporation and the spouse was employed by
corporation; non-interest and remote interest exceptions held to be
inapplicable].
15 Lexin v. Superior Court, 47 Cal.4th 1050, 1079-1085 (2010).
16 People v. Rizzo, 214 Cal.App.4th 921 (2013).
17 89 Ops.Cal.Atty.Gen. 217, 221 (2006) [but note that the contract in
question was allowed to be approved under the rule of necessity].
18 83 Ops.Cal.Atty.Gen. 246 (2000).
19 Lexin v. Superior Court, supra, 47 Cal.4th 1050, 1081 (2010).
20 78 Ops.Cal.Atty.Gen. 230 (1995).
21 65 Ops.Cal.Atty.Gen. 305 (1982); see also 69 Ops.Cal.Atty.Gen. 102
(1986).
22 89 Ops.Cal.Atty.Gen. 217 (2006).
23 Thomson v. Call, supra, 38 Cal.3d 633; People v. Chacon, 40 Cal.4th
558 (2007).
24 Government Code section 1092(a); County of San Bernardino v.
Walsh, 158 Cal.App.4th 533 (2007).
25 Government Code section 1092(b).
26 Government Code section 1097; People v. Gnass, supra, 101 Cal.
App.4th 1271, 1305; People v. Honig, 48 Cal.App.4th 289 (1996).
27 Government Code sections 1097.1 to 1097.5, added by AB 1090,
2013 California Statutes, Chapter 650.
28 Campagna v. City of Sanger, supra, 42 Cal.App.4th 533, 539-540.
7 Campagna v. City of Sanger, 42 Cal.App.4th 533 (1996).
29 Conflicts of Interest, California Attorney General, 2010, at p. 66.
8 People v. Gnass , 101 Cal.App.4th 1271, 1289-1292 (2002) [note
that the indictment in Gnass was set aside because of defective
instructions to the grand jury on the question whether the Section
1090 violation was knowing and willful].
30 Id. at pp. 66-67.
9 Stigall v. City of Taft, 58 Cal.2d 565, 571 (1962); Millbrae Assn.
for Residential Survival v. City of Millbrae, 262 Cal.App.2d 222,
237 (1968); 81 Ops.Cal.Atty. Gen. 169 (1998) [participation in the
planning and approval of a revolving loan program precludes
subsequent borrowing from the fund]; People v. Gnass, supra, 101
Cal.App.4th 1271, 1292-1298.
31 Lexin v. Superior Court, supra, 47 Cal.4th 1050, 1085.
32 People v. Christiansen, supra, 216 Cal.App.4th 1181.
33 See 86 Ops.Cal.Atty.Gen 138 (2003).
10 Thomson v. Call, 38 Cal.3d 633 (1985).
11 86 Ops.Cal.Atty.Gen. 138 (2003).
12 Fraser-Yamor Agency, Inc. v. County of Del Norte, 68 Cal.App.3d 201
(1977).
13 Pending Opinion No. 12-409; request submitted May 7, 2012.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
CHAPTER 5:
THE CITY ATTORNEY’S ROLE AS PROSECUTOR
A.INTRODUCTION
City attorneys occasionally perform dual functions, handling
both civil and criminal matters. Generally, the performance
of these dual functions will not result in the disqualification
of the city attorney’s office.1 But the intrusion of improper
influences upon the city attorney’s exercise of prosecutorial
discretion can result in disqualification in criminal and code
enforcement matters and possibly other proceedings where
a city attorney is representing the City as a sovereign.2
This chapter examines those circumstances where a city
attorney’s other duties and responsibilities and improper
influences may conflict with his or her role as a prosecutor.
B. FACTORS TO CONSIDER WHEN FILING
CRIMINAL CASES
1. Impartiality and Objectivity
Prosecuting criminal and quasi-criminal proceedings
presents special ethical issues. For instance, it may be
alleged that the city attorney filed a criminal complaint or
a code enforcement action as a result of pressure from the
city manager, chief of police, city council or an individual
council member. There may also be allegations that the
city attorney filed the action in an effort to protect the city
from civil liability; for example, filing a criminal complaint for
battery on a peace officer to counteract or deter a potential
civil action against the city for use of excessive force.
City attorneys serving as prosecutors on behalf of the
people in civil nuisance abatement and criminal proceedings
are subject to heightened standards of impartiality and
objectivity. City attorney decisions in these proceedings
must not be influenced by factors other than probable cause
and the interests of justice. As the California Supreme Court
observed in People ex rel. J. Clancy v. Superior Court:
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“[A] prosecutor’s duty of neutrality is born of two
fundamental aspects of his employment. First, he is a
representative of the sovereign; he must act with the
impartiality required of those who govern. Second,
he has the vast power of the government available
to him; he must refrain from abusing that power by
failing to act evenhandedly.”3
Indeed, courts are likely to apply these standards in any case
where the government is exercising powers unique to a
sovereign as in civil nuisance abatement and condemnation
actions.4
Penal Code section 1424 authorizes disqualification of
a criminal prosecutor where: (1) there is a reasonable
possibility that the prosecutor may not exercise his or her
discretionary function in an evenhanded manner; and (2)
the conflict is so grave that it is unlikely that a criminal
defendant will receive fair treatment.5 The conflict must
be more than apparent. “The statute does not allow
disqualification because participation of the prosecutor
would be unseemly, appear improper, or even reduce
public confidence in the criminal justice system. An
actual likelihood of prejudice must be shown.”6 Note that
public agency attorneys operating under contingency fee
agreements also face the potential for disqualification under
Penal Code section 1424.
2. Probable Cause
Violations of municipal codes can be enforced criminally as
misdemeanors7 or infractions8 or enforced administratively.9
City attorneys prosecuting criminal violations of their city’s
municipal codes are subject to Rule 5-110, which prohibits
the filing of criminal charges where the prosecuting attorney
knows or should know that the charges are not supported
by probable cause. Likewise, if after filing the charges the
prosecuting attorney discovers the lack of probable cause,
he or she must notify the court in which the charges are
pending and seek dismissal of the action.10
CHAPTER 5: THE CITY ATTORNEY’S ROLE AS PROSECUTOR
Practice Tip:
Practice Tip:
The city council has budgetary authority over the
resources that the city attorney may devote to
criminal prosecutions. But the city attorney who
also acts as a prosecutor needs to clearly warn
the council, city manager, chief of police and other
interested officials early in his or her tenure that they
must not try to influence city attorney’s exercise
of prosecutorial powers including whether to file
criminal complaints in specific cases. Attempts to
influence these decisions expose the city to a defense
claim that probable cause does not support the
decision to prosecute or that the city attorney is not
independently exercising prosecutorial powers. The
city attorney who has already given this warning can
more easily remind officials when a highly visible or
political case arises that may invite interference.
Under Rule 5-120, city attorneys should exercise
restraint in making statements to the media when
exercising the sovereign or unique governmental
powers to file or prosecute civil or criminal
proceedings to avoid materially prejudicing a pending
case. The prosecutor can, however, respond to
recent publicity not initiated by the prosecutor or
the client to the extent reasonably necessary to
protect the city or one of its officers or employees
from the substantial undue prejudicial effect of that
publicity. The city attorney should limit the response
to providing the information necessary to mitigate the
recent adverse publicity.
Practice Tip:
Situations giving rise to administrative penalties
can trigger a criminal prosecution of the owner of
the property or business. This connection between
the civil and criminal aspects of the enforcement
supports the need for the city attorney’s neutrality and
objectivity.11 Therefore, city attorneys should apply the
same standards of review when deciding whether to
institute actions to abate nuisances and to enforce
administrative citations for municipal code violations.
3. Prosecutorial Immunity
Federal law provides city attorney prosecutors with absolute
immunity from liability for their acts in initiating or pursuing
criminal charges.12 Likewise, under state law, city attorneys
are immune from any actions for malicious prosecution.13
However, immunity is qualified, not absolute, regarding
statements a prosecutor makes to the media regarding a
criminal case.14
4. Conflicts of Interest of the City Attorney
Conflicts of interest requiring recusal of the city attorney in
a criminal or quasi-criminal proceeding may arise when he
or she acquires a conflicting personal or emotional – rather
than professional – interest in the case or where the city
attorney seeks to use the criminal proceedings as a means
to advance “personal or fiduciary interests.”15 In the event
of a conflict of interest in proceeding to be brought in the
name of the people, the city attorney should refer the matter
to the local District Attorney’s Office. Examples of conflicts
of interest and appearance of conflicts that would likely
require recusal include:
»» Prosecution of officers, employees or agents of the
city for an act committed in the course and scope of
their official duties;
»» Prosecution of a city council member or personnel
of the city attorney’s office, or continued prosecution
of a matter against an individual who becomes a
council member or department staff member after
the criminal action is filed;
»» Prosecution of an officer, employee or agent of
the city who has previously provided confidential
information relating to the criminal prosecution to
members of the city attorney’s office for use in a civil
matter; and
»» Cases in which an employee of the city attorney’s
office, or member of an employee’s family, is the
victim of the alleged crime.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
Proper management and oversight should be provided to
avoid such conflicts of interest and ensure recusal at the
earliest opportunity.
Practice Tip:
A city attorney who serves as a prosecutor cannot
seek direction from the city council when filing a
criminal case. However, a city attorney filing a civil
action can, and in many cases must, receive direction
from the city council before filing the lawsuit. In the
case of a nuisance abatement action, the city attorney
may bring either a criminal action in the name of the
“People” or a civil action in the name of the city.16 In
the former case, no council direction is required or
permitted, and the case cannot be discussed in closed
session because the People, not the city, are the client.
One consequence of proceeding with a criminal action is
that there is no attorney-client privilege with respect to
the city because the city is not the client in that instance;
however, the attorney work-product and other privileges
that are held by prosecutors would still apply.17 When
seeking direction from the city council regarding institution
of a potential civil nuisance abatement action, the city
attorney should focus the council’s deliberations on factors
that will enable the city attorney to comply with his or her
obligation to file such actions with impartiality and neutrality
and to pursue fairness and the interests of justice.
C. CRIMINAL ACTIONS CANNOT BE USED TO
GAIN AN ADVANTAGE IN CIVIL CASES
A common potential pitfall involves a city attorney
prosecutor’s use of his or her position to gain an
advantage in a civil action. One example is the dismissal
of a criminal action in exchange for the release of civil
claims or a stipulation to probable cause for the underlying
criminal arrest. A prosecutor’s “offer to dismiss a criminal
prosecution may not be conditioned on a release from civil
liability because that practice constitutes a threat to obtain
an advantage in a civil dispute in violation of the Rules of
Professional Conduct.”18
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By contrast, in response to an offer from defense counsel,
the prosecutor and defendant may stipulate to the
existence of probable cause as part of the dismissal of the
criminal case where there is no basis for a finding that the
prosecutor sought the stipulation to gain any civil advantage.
Ultimately, the question will be whether the prosecutor
acted in the interest of justice or sought to coerce the
defendant into agreeing to the stipulation. In this inquiry the
defendant’s access to and receipt of advice from counsel on
the stipulation will also blunt a claim of coercion.19
A court may apply the same ethical principles to a city
attorney’s use of administrative or civil enforcement
proceedings to exert leverage in existing or potential civil
disputes. The key distinction in these matters is the extent
to which public criminal, administrative or disciplinary
charges are used to leverage concessions in a related civil
matter.20
A city attorney is not disqualified from prosecuting
defendants merely because the city attorney would also
defend any civil action the defendants may file against
the city and arresting officers alleging, for example,
excessive force in the arrest leading to the prosecution.21
There is a long history of government law offices both
prosecuting crimes and defending civil actions that the
criminal defendants file against the government, and
courts have held that the a city attorney’s dual service
as a city’s criminal prosecutor and civil defender does
not per se warrant recusal of the city attorney from the
criminal proceeding.22
CHAPTER 5: THE CITY ATTORNEY’S ROLE AS PROSECUTOR
Practice Tip:
City attorney offices performing civil and criminal
(including code enforcement) functions should
establish internal policies and procedures that avoid
the intrusion or appearance of intrusion of improper
influences in the criminal proceeding.23 For example,
guidelines that separate civil and prosecutorial
functions and prohibit communications between
civil lawyers and criminal prosecutors could forestall
claims that the office is using the criminal process
to deter the filing of civil actions against the city
and its officials. To that end the city attorney should
consider assigning to a chief deputy final authority
over prosecutorial decisions on individual cases
while the city attorney retains authority over general
administrative and policy matters related to the
criminal functions of the office.
Notwithstanding Section 41805, the court in People v.
Pendleton found that since a city attorney did not prosecute
city crimes (although his firm did handle prosecutions for
another city) and had aggressively represented the criminal
defendant, there was no prejudice to the criminal defendant
as a result of the city attorney’s failure to comply with
Section 41805 and did not reverse the criminal conviction.26
The Los Angeles County Bar Association issued an ethics
opinion reiterating that firms that engage in prosecutorial
work in enforcing violations of the city’s municipal code
may not, represent criminal defendants. Even though such
representation may not result in per se reversals of criminal
convictions, the Association concluded such representation
violates Section 41805 and prior Supreme Court decisions.27
D. CONTRACT CITY ATTORNEYS AND THE ABILITY
TO PROVIDE CRIMINAL DEFENSE SERVICES
In People v. Rhodes, the California Supreme Court held that
a city attorney with prosecutorial responsibilities may not
defend persons accused of crimes.24 The court observed
that even in the absence of a direct conflict of interest with
the city attorney’s official duties, “there inevitably will arise
a struggle between, on the one hand, counsel’s obligation
to represent his client to the best of his ability and, on the
other hand, a public prosecutor’s natural inclination not to
anger the very individuals whose assistance he relies upon
in carrying out his prosecutorial responsibilities.”25
However, following the Rhodes decision, Government Code
section 41805 was amended to allow a city attorney and his
or her firm to represent criminal defendants in cases other
than violations of city laws, as long as:
»» The firm has been expressly relieved of all
prosecutorial responsibilities on the city’s behalf; and
»» The accused had been expressly informed of the
defense counsel’s role as city attorney and had
waived any conflict created by it.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
CHAPTER 5 ENDNOTES
5
Millsap v. Superior Court, 70 Cal.App.4th 196 (1999).
1
6
California Government Code section 36900.
7
Ibid.
8
California Government Code section 53069.4.
9
ABA Annotated Model Rules of Professional Conduct, Rule 3.8,
Special Responsibilities of a Prosecutor.
2
3
“[A] public attorney, acting solely and conscientiously in a public
capacity, is not disqualified to act in one area of his or her public
duty solely because of similar activity in another such area.” In
re Lee G., 1 Cal.App.4th 17, 29 (1991). See also People v. Superior
Court (Hollenbeck), 84 Cal.App.3d 491, 504 (1978).
People v. Municipal Court (Byars), 77 Cal.App.3d 294, 296
(1977) [Court found that there was no conflict or appearance
of impropriety that prevented city attorney from handling a
prosecution. “Here we must determine whether the circumstances
are appropriate to justify trial court action barring participation by
a prosecuting attorney where: (1) a city attorney is charged by law
with the obligation both of prosecuting misdemeanors within the
city and of defending civil actions against the city and its agents;
(2) a claim is pending against the city and its agents asserting
liability to the defendants in the criminal prosecution arising out of
the same incident which is the basis of the prosecution; (3) there
is no evidence of personal, as opposed to purely professional and
official, involvement of anyone in the prosecutor’s office in the
civil litigation; and (4) there is no evidence supporting an inference
that the prosecutor is improperly utilizing the criminal proceeding
as a vehicle to aid his function of defending claims against his
employer.”]
People ex rel. J. Clancy v. Superior Court, 39 Cal.3d 740, 746 (1985)
[citing ABA Code of Prof. Responsibility, EC 7-14]. Clancy involved
a nuisance abatement action against an adult bookstore where
the prosecuting attorney was being paid a contingency fee. The
Court concluded that certain nuisance abatement actions share
the public interest aspect of criminal cases and often coincide
with criminal prosecutions and found that the lawyer’s contingent
fee arrangement was improper, just as it would be in a criminal
prosecution. The Court analyzed the case under principles of
neutrality and applied conflict of interest rules substantially similar
to the conflict of interest rule applicable to criminal prosecutors.
Later, in County of Santa Clara v. Superior Court , 50 Cal. 4th 35,
54 (2010), the California Supreme Court clarified that the rules
applicable to criminal prosecutors do not always apply in nuisance
abatement actions, but principles of heightened neutrality are valid
and necessary in such actions. Unlike Clancy, in Santa Clara, the
Court upheld the public agency’s engagement of contingent-fee
counsel where the public entity’s in house lawyers retained and
exercised exclusive approval authority over all critical prosecutorial
decisions in the case including the unfettered authority to dismiss
the case. In that case the court also noted that the action did not
seek to put the defendant out of business and that the defendant
had the resources to mount a full defense.
10 Clancy, supra, 39 Cal. 3d at 749, and County of Santa Clara, supra,
50 Cal. 4th at 53, fn 10.
11 Imbler v. Pachtman, 424 U.S. 409, 432 (1976) [lead conc. opn. of
White, J.] [prosecutor immune in section 1983 action]; but see
Buckley v. Fitzsimmons, 509 U.S. 259, 273 (1993) [attorney who
participated in a pre-arrest investigation functioned as a detective
searching for clues, not a prosecutor, and therefore, qualified,
not absolute, immunity applied] and Burns v. Reed, 500 U.S. 478
(1991) [no absolute immunity for prosecutor’s legal advice to police
officers].
12 California Government Code section 821.6 provides: “A public
employee is not liable for injury caused by his instituting or
prosecuting any judicial or administrative proceeding within the
scope of his employment, even if he acts maliciously and without
probable cause.”
13 Buckley v. Fitzsimmons, 509 U.S. 259, 278 (1993) [“Statements to
the press may be an integral part of a prosecutor’s job…and they
may serve a vital public function. But in these respects a prosecutor
is in no different position than other executive officials who deal
with the press, and…qualified immunity is the norm for them.”]
14 People v. Superior Court (Martin), 98 Cal.App.3d 515, 521 (1979)
[citations omitted].
15 California Code of Civil Procedure section 731.
16 California Penal Code section 1054.6.
17 State Bar of Cal. Standing Comm. on Prof’l Responsibility and
Conduct, Formal Op. 1989-106 and 1991-124. State Bar Rules of
Professional Conduct, rules 5-100 and 5-110; see also MacDonald v.
Musick (9th Cir. 1970) 425 F.2d 373, 375.
18 Salazar v. Upland Police Department, 116 Cal.App.4th 934, 944
(2004).
19 Cohen v. Brown, 173 Cal.App.4th 302, at pp. 317-318.
21 People v. Municipal Court (Byars), 77 Cal.App.3d 294, 298 (1978).
22 Id. at 300.
23 “Ethics and Responsibility for the California Prosecutor,” California
District Attorneys Association, 3rd Edition (1992), Section 2.9 “Dual
Function Offices,” pages 55-58.
City of Los Angeles v. Decker, 18 Cal.3d 860 (1977); Clancy, supra,
39 Cal.3d at 748-749.
24 People v. Rhodes, 12 Cal.3d 180, 186-187 (1974).
4
People v. Choi, 80 Cal.App.4th 476, 483 (2000). When a close
personal friend of the district attorney was murdered close
in time and location to the murder that occurred in the case
being prosecuted, the court found that there was a reasonable
possibility that the district attorney’s office might not exercise its
discretionary function in an evenhanded manner and held recusal
of the entire district attorney’s office was appropriate.
26 People v. Pendleton, 25 Cal.3d 371, 379 (1979).
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25 Id. at 184.
27 L.A.Co. Bar Assn. Form. Op. 453 (1991).
CHAPTER 6: THE CITY ATTORNEY AND OUTSIDE COUNSEL
CHAPTER 6:
THE CITY ATTORNEY AND OUTSIDE COUNSEL
A.INTRODUCTION
A variety of important considerations should guide the
retention of outside counsel by city attorneys. This chapter
discusses several factors that may come into play when
selecting and working with outside counsel, such as:
»» Avoiding improper grounds for hiring or terminating
outside lawyers;
»» Developing and using standard contracting
procedures;
»» Conflicts of interest;
»» Billing and other practices of the outside firm;
»» Special rules for outside counsel in civil public
nuisance contingency fee arrangements; and
»» Confidentiality of billing records.
B. AVOID IMPROPER GROUNDS FOR HIRING OR
FIRING OUTSIDE LAWYERS
City attorneys must select and manage outside counsel
in a manner that does not result in discrimination, or
create the perception of an improper basis for selecting
or terminating outside counsel. It can be a challenging
situation for city attorneys when, for instance, council
members have expressed concern based on either fact
or perception, that their race, national origin, sex, sexual
orientation, religion, age, or disability is not represented
among the outside lawyers selected by the city attorney.
It is also challenging if the city has not had lawyers of
particular under-represented groups in the past and
the city manager feels that it is time for the city to hire
someone from those unrepresented groups.
Another difficult situation may occur when the city
is contemplating a jury trial involving allegations of
discrimination based on race or sex. Does the city attorney
select someone because of the pressure from a council
member or the city manager? Does the city attorney hire
someone because they are the same race or sex as the
plaintiff assuming that those characteristics will influence
the jury?
In making decisions regarding selection of outside counsel,
city attorneys must be guided by principles and laws set
forth in the State Bar Rules of Professional Conduct; United
States and California Constitutions; and in state statutes
that prohibit discrimination in the hiring of outside counsel
on the basis of race, national origin, sex, sexual orientation,
religion, age, or disability. Neither a perceived view of
the jury regarding the race, national origin, sex, sexual
orientation, religion, age, or disability of the lawyer, nor the
feeling that the city should have more legal representation
by members of a specific race, national origin, sex, sexual
orientation, religion, age, or disability should control the
selection of outside counsel.
1. Rule 2-400
Rule 2-400 prohibits discriminatory conduct in a law
practice, which includes governmental legal departments,
on the basis of race, national origin, sex, sexual
orientation, religion, age, or disability in the hiring,
discharge or other determination regarding the conditions
of employment of any person. Accordingly, to avoid the
risk of violating rule 2-400, city attorneys should select
outside lawyers based on the lawyer’s or law firm’s ability
to provide quality legal representation in a cost effective
manner rather than on race, national origin, sex, sexual
orientation, religion, age, or disability.
2. State and Federal Laws
The California Constitution prohibits public entities from
discriminating against, or granting preferential treatment
to, any individual or group on the basis of race, sex, color,
ethnicity, or national origin in the operation of public
employment, public education or public contracting.1
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Further, public programs or benefits that are provided based
on race or sex have generally been presumed invalid as
suspect classifications that violate the equal protection
clause, absent some showing that such discrimination was
necessary to remedy prior discrimination.2 Therefore, to
support a determination of the necessity to hire a law firm
or lawyer based on race, ethnicity, or gender, there must be
a showing of past discrimination that supports the need to
create specific racial, ethnic or gender hiring requirements.
Practice Tip:
Unfortunately, there is no guiding authority on the
nature of a preferential program that would pass
constitutional muster. Therefore, when selecting
outside counsel, city attorneys should regularly call on
lawyers without regard to race, national origin, sex,
sexual orientation, religion, age, or disability. This is an
excellent way to maintain a broad base of qualified
lawyers from whom to choose. If council members
exert pressure to hire a lawyer or firm of a particular
ethnicity, the city attorney may be able to deflect
such pressure by telling them that they utilize lawyers
from a diverse pool. The city attorney should also
remind them that selecting or not selecting someone
because of their race, national origin, sex, sexual
orientation, religion, age, or disability violates the rules
of professional conduct for lawyers in California.
Practice Tip:
If pressure is being exerted by a council member or
city manager to fire or stop using a lawyer or law
firm that is performing in a satisfactory manner and
the city attorney senses that it is because they are
not viewed as a member of the “right” group, the
city attorney should indicate that the matter is being
handled appropriately. Further, the city attorney should
advise them that, consistent with city policy and rules
of professional conduct, they can fire or stop using a
lawyer or firm for any lawful reason or no reason, they
cannot make those types of decisions based on illicit
reasons, such as those related to race, national origin,
sex, sexual orientation, religion, age, or disability.
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3. Decisions to Terminate Outside Counsel
Based on the Lawyer’s Public Criticism
While the First Amendment’s guarantee of free speech
may protect some independent city contractors from
termination because of their speech on matters of public
concern,3 the Ninth Circuit Court of Appeals has held that
lawyers who hold policymaking positions do not have such
protection.4 Nevertheless, city attorneys should exercise
care in decisions regarding termination of outside lawyers
because they are outspoken critics of the city. Depending
on the nature of comments made, the role played by the
outside attorney, and issues related to a lawyer’s duty
of loyalty to his or her client, it can be difficult to know if
termination on such grounds will or will not be protected by
the First Amendment.
C. DEVELOP AND USE STANDARD
CONTRACTING PROCEDURES
In addition to complying with the rules prohibiting
discrimination, it is advisable to have systems in place to
avoid allegations of “cronyism” in the selection of outside
counsel. One such form of “cronyism” may occur when
friends or colleagues of council members are chosen
as outside counsel. This can become problematic if the
attorneys are selected frequently, and even more so if
the city attorney does not agree with their approach to a
matter or if they do not effectively represent the city. To
avoid this situation, it is advisable to refrain from selecting
lawyers who are politically involved at the city level, unless
they are clearly the best (or only) lawyer qualified to
handle the matter.
Methods for selection can vary, based on such factors
as timing, cost, required technical/specialized expertise,
prior experience with a firm or lawyer, and the type of
legal matter involved. For example, if timing is a factor and
selection must be done immediately, the city attorney may
want to use legal counsel with whom he or she has worked
successfully on prior matters.
CHAPTER 6: THE CITY ATTORNEY AND OUTSIDE COUNSEL
D. CONFLICTS OF INTEREST
An agency’s contract with outside counsel can provide
that the attorney must not acquire a conflict of interest
during the term of engagement. Some cities have policies
precluding the hiring of lawyers who also represent clients
adverse to the city.
Practice Tip:
It may become embarrassing if it is discovered that an
outside firm represents another client that is adverse
to the city. Even if such representation may not be
“adverse” for purposes of Rule 3-310; the situation will
likely still be problematic.
One way to avoid perceived conflict problems is to
include a clause in the engagement agreement that
prohibits the lawyer from representing clients who
are adverse to the city. In considering issues related
to waiver and consent, the city attorney should keep
in mind who has authority to grant a waiver and give
informed consent to the representation. Depending on
the city’s practice, the city attorney, the city manager
or the city council may give such consent.
A conflict may arise when a contract city attorney
participates in a decision to “assign” new work to his or
her law firm. Government Code section 1090 may apply
to outside counsel once they are hired by the city (see
chapter 4).
The Political Reform Act and Fair Political Practices
Commission (FPPC) regulations (see chapter 3), along with
local ordinances or rules set forth guidelines regarding gifts
to public officials and employees. City attorneys, like many
other public officials, must be sure to report the value of
gifts received from lawyers. City attorneys should keep
track of meals paid for by outside counsel, tickets to various
events, gifts of spa treatments, and so on that are provided
by law firms doing business with the city. While lawyers who
deal regularly with municipalities are probably aware of the
gift restrictions, those who are newer to city representation
may be unaware of the requirements and may need to be
educated regarding the FPPC rules regarding gifts.
E. BILLING AND OTHER PRACTICES OF THE
OUTSIDE FIRM
The city attorney or his or her staff should review the bills
and monitor the billing and other practices of outside
counsel in order to avoid questionable ethical practices
by outside counsel. The city attorney, or another lawyer
or person familiar with the matter being handled, should
review the bills submitted by the outside lawyer. The billing
statement should provide the city attorney’s office with a
quick summary of case activity and tell how much time is
spent on various aspects of a matter.
Practice Tip:
The same person should review the bill on a particular
matter each month and should look for content, time
spent, and consistency with the agreed upon terms
of representation. Block billing (where several items
are grouped together within one large block of time)
should be discouraged in most, though not necessarily
all, situations. Review of bills also helps to ensure
that major activities were first cleared with the city
attorney’s office. Periodic questioning of items on the
bill informs the firm that the city attorney is reviewing
the bills. The city should not be charged for responding
to questions about the bills.
It is important that the city attorney be aware of the status
of matters handled by outside counsel. Frequently, the city
attorney is charged with responsibility for all legal matters in
which the city is involved. Reviewing the bills, pleadings and
correspondence, and regular updates from outside counsel
are important to the city attorney’s ability to manage that
responsibility; as well as for his or her ability to answer
questions from staff or council members about a particular
matter. Accordingly, any agreement with the outside law
firm should designate that the city attorney is in charge of all
legal services and tactical decision-making. The city council
and city manager should also understand that the city
attorney must have the discretion to control the manner in
which litigation or other legal matters are handled, and that
appropriate oversight is being exercised regarding the firm.
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Practice Tip:
Supervising outside counsel includes doing such things
as watching them in court or at a hearing, reviewing
their work product, and periodically commenting
on documents they prepare. Also, the city attorney
should be in regular contact and communicate with
the outside lawyer regarding the matter, including
prospects for settlement and alternate means of
dispute resolution. The city attorney should ensure
that outside counsel does not delegate any aspect of
the case without prior consultation with and approval
by the city attorney. That being said, the city attorney
and the outside lawyer should view the relationship
as a partnership to provide the client with the best
possible representation.
F. SPECIAL RULES FOR OUTSIDE COUNSEL IN
CIVIL PUBLIC NUISANCE CONTINGENCY FEE
ARRANGEMENTS
At times, cities may find it advantageous to employ outside
counsel on a contingency fee basis. Special rules apply when
outside counsel are retained on a contingency fee basis to
handle civil nuisance actions.
A public lawyer or outside counsel acting as a public lawyer
must observe the rules of prosecutorial neutrality even
in civil nuisance actions by avoiding a pecuniary interest
in the outcome of the matter.5 California courts have
general authority to disqualify counsel when necessary
in the furtherance of justice.6 The courts will exercise
their authority to disqualify outside counsel hired on a
contingency fee basis by a city to prosecute a civil public
nuisance action when important constitutional concerns
(such as the First Amendment) are implicated, ongoing
business activity is threatened, and there is a threat of
criminal liability.7
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In County of Santa Clara v. Superior Court, the California
Supreme Court has upheld the use of contingency fee
arrangements with outside counsel in civil public nuisance
actions, while pointing out that “a heightened standard
of neutrality is required for attorneys prosecuting publicnuisance actions on behalf of the government.”8 This
heightened standard is generally met, and the retention of
private counsel on a contingent-fee basis is permissible, if
neutral, conflict-free government attorneys retain the power
to control and supervise the litigation and the government’s
action poses no threat to fundamental constitutional
interests and does not threaten the continued operation of
an ongoing business.9
The power to “control and supervise” public nuisance
actions must be reflected in a contingency fee
agreement, which must include several specific criteria
indicating control of “critical discretionary decisions” by
the supervising in-house public agency attorney, including
at a minimum:
»» The authority to settle the case
»» The ability for any defendant to contact the lead
government attorneys directly
»» The retention by the government attorneys of
complete control over the course and conduct of the
case
»» The retention by the government attorneys of veto
power over any decisions made by outside counsel
»» The government attorney with supervisory authority
must be personally involved in overseeing the case.10
CHAPTER 6: THE CITY ATTORNEY AND OUTSIDE COUNSEL
G. CONFIDENTIALITY OF OUTSIDE COUNSEL
BILLING RECORDS
CHAPTER 6 ENDNOTES
1
California Constitution, art. 1, section 31 [Proposition 209].
The League of California Cities publication, The People’s
Business: A Guide to the California Public Records Act
(2008; 2011 Supplement) contains an excellent discussion
of the disclosability of outside counsel billing records.
In general, billing records are exempt from disclosure
under the attorney-client privilege or attorney workproduct doctrine to the extent they describe an attorney’s
impressions, conclusions, opinions, legal research or
strategy.11 However, the name of the matter, the total
invoice amount and date are not exempt and should be
provided in response to a public records request after
redacting the privileged information.12
2
Shaw v. Reno, 509 U.S. 630, 642 (1993); Richmond v. Croson Co.,
488 U.S. 469 (1989). As the California Supreme Court observed,
“the United States Supreme Court never has held that societal
discrimination alone is sufficient to justify a racial classification.
Rather, the Court has insisted upon some showing of prior
discrimination by the governmental unit involved before allowing
limited use of racial classification in order to remedy such
discrimination.” Hi-Voltage Wire Works, Inc. v. City of San Jose, 24
Cal.4th 537, 568 (2000).
3
Board of County Commissioners v. Umbehr, 518 U.S. 668 (1996). In
Umbehr, the United States Supreme Court found that independent
contractors are protected from termination of their at-will
government contracts in retaliation for their exercise of free speech
rights. The contractor must show initially that the termination was
motivated by his or her speech on a matter of public concern.
The government “will have a valid defense if it can show, by a
preponderance of the evidence, that, in light of their knowledge,
perceptions, and policies at the time of the termination, the Board
members would have terminated the contract regardless of his
speech.” Id. at p. 685.
4
Biggs v. Best, Best & Krieger, 189 F. 3d 989 (9th Cir. 1999) [an
associate attorney at a contract city attorney firm could be
terminated because of political activity related to the city since she
acted as a policymaker]; see also, Oasis West Realty, LLC v. Goldman
(2011) 51 Cal.4th 811.
5
County of Santa Clara v. Superior Court, 50 Cal.4th 35, 50 (2010).
6
Id., at p. 48.
7
Id., at p. 54.
8
Id., at p. 57.
9
Id., at 58.
Practice Tip
City attorneys may wish to direct outside counsel to
provide a cover sheet with a billing summary showing
disclosable information such as who did the work, the
number of hours expended and the amount of the bill.
10 Id., at pp. 63-64.
11 U.S. v. Amlani (9th Cir. 1999) 169 F.3d 1189 (9th Cir. 1999); Clarke v.
American Commerce Nat. Bank (9th Cir. 1992) 974 F.2d 127; Smith
v. Laguna Sur Villas Community Assn. (2000) 79 Cal.App.4th 639
(2000).
12 California Government Code section 6254(k); The Ninth Circuit Court
of Appeals has stated that “[o]ur decisions have recognized that
the identity of the client, the amount of the fee, the identification
of payment by case file name, and the general purpose of the
work performed are usually not protected from disclosure by the
attorney-client privilege.” Clarke v. American Commerce Nat’l
Bank, 974 F.2d 127, 129 (9th Cir.1992). United States v. Amlani,
169 F.3d 1189, 1194 (9th Cir. 1999); see also County of Los Angeles
v. Superior Court 211 Cal.App.4th 57 (2012) approving redaction
of law firm billing records, “to show [only] the information that is
not work product – the hours worked, the identity of the person
performing the work, and the amount charged.”
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CHAPTER 7:
THE DUTY OF CONFIDENTIALITY
A.INTRODUCTION
This chapter examines the ethical duty of city attorneys to
maintain the confidentiality of matters involving their clients.
It also discusses the impact of whistleblower laws on city
attorneys’ ethical responsibilities of confidentiality.
B.CONFIDENTIALITY
Among the most important duties an attorney owes to the
client is the duty of confidentiality (see chapter 1). Given
that confidentiality is the cornerstone of trust between the
client and the attorney, California public policy has long held
this duty is paramount, and may not be breached except in
very limited circumstances. Business and Professions Code
subsection 6068(e) requires an attorney to:
“[M]aintain inviolate the confidence, and at every peril to
himself or herself to preserve the secrets, of his or her
client… [A]n attorney may, but is not required to, reveal
confidential information relating to the representation of a
client to the extent that the attorney reasonably believes
the disclosure is necessary to prevent a criminal act that the
attorney reasonably believes is likely to result in death of, or
substantial bodily harm to, an individual.”
The California Supreme Court put it this way:
“Protecting the confidentiality of communications
between attorney and client is fundamental to our legal
system. The attorney-client privilege is a hallmark of our
jurisprudence that furthers the public policy of ensuring
‘the right of every person to freely and fully confer and
confide in one having knowledge of the law, and skilled in
its practice, in order that the former may have adequate
advice and a proper defense’.”1
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Additionally, Evidence Code section 954 allows a client to
refuse to disclose, and to prevent others from disclosing,
confidential communications between the client and the
client’s attorney. The attorney-client relationship has been
characterized by at least one court as “sacred,”2 while
another court has admonished that the relationship “must
be of the highest character.”3 The duty of confidentiality
survives the termination of the attorney-client relationship,
apparently indefinitely.4
If a city attorney finds himself or herself in federal court
on behalf of a client, the Federal Rules of Evidence include
specific provisions related to the attorney-client privilege,
and circumstances under which it may be waived in the
context of the federal matter. The Rules generally provide
that the federal common law on privileges controls, unless
otherwise provided for in the U.S. Constitution, federal
legislation or a rule of the Supreme Court,5 but they
also contain specific provisions related to waivers of the
attorney-client privilege in federal litigation.6 There is an
ongoing debate as to the scope of the privilege in the federal
context and it is likely that the scope of the privilege is
narrower in federal proceedings.7
1. Confidentiality in the Public Sector
The duty of confidentiality takes on a special meaning in the
public sector where the client is a public entity and not an
individual.8 In the governmental setting, the client cannot
speak for itself, but rather, must rely on its elected and other
authorized officials to act in its interest. Thus, the issues of
who possesses and who may exercise the attorney-client
privilege, and to whom the public entity attorney owes the
duty of confidentiality, become particularly relevant when
the city attorney faces or suspects official malfeasance.
CHAPTER 7: THE DUTY OF CONFIDENTIALITY
2. Government Malfeasance
In the Spring of 2000, Cindy Ossias, a government
attorney for the California Department of Insurance,
disclosed confidential information that allegedly evidenced
governmental abuse of authority in her department.
The State Bar’s Office of Trial Counsel (OTC) investigated
her actions for potential violations of the duty of
confidentiality. While the OTC ultimately declined to
prosecute Ossias, her story reflects the difficulty attorneys
face in government representation.
The Rules reinforce the standard of confidentiality set
in Business & Professions Code section 6068(e), even in
the context of an attorney “know[ing] that an actual or
apparent agent of the [client] organization acts or intends
or refuses to act in a manner that is or may be a violation
of law reasonably imputable to the organization, or in a
manner which is likely to result in substantial injury to the
organization …”9 The Rules provide that the attorney “shall
not violate his or her duty of protecting all confidential
information,” and if the client “insists upon action or a
refusal to act that is a violation of law and is likely to result
in substantial injury to the organization,” the attorney’s
response “is limited to the [attorney’s] right, and, where
appropriate, duty to resign in accordance with rule 3-700.”10
The Rules require attorneys to protect the confidences of
the client, at all costs, while state whistleblower statutes
(discussed below) encourage all government employees to
report government malfeasance. California law has given
more importance to maintaining the duty of confidentiality
than to the public attorney’s status as a government
employee and would-be whistleblower.
Even when an attorney representing an organization
becomes aware that an agent of the organization intends
to commit a crime that may result in substantial injury
to the organization, the attorney “shall not violate his
or her duty of protecting all confidential information.”12
The attorney has limited options, including: (1) urging the
agent to reconsider his or her actions, or (2) going up the
chain of command to the highest level of the organization
authorized to act. If the highest level of the organization
refuses to act and no other legally permissible options can
be discerned, then the attorney’s only remaining option
may be to resign.13 Rule 3-700 delineates the circumstances
under which withdrawal from representation of a client is
mandatory and when it is permissive.14
While Rule 3-600 makes the duty of confidentiality
paramount, it does not directly address the unique nature
of government representation as it relates to either the
duty of confidentiality or whistleblowing. A 2001 Attorney
General opinion did, however address this issue.15 The
opinion noted that, in some respects, “[R]ule 3-600 appears
designed to meet the concerns of the private sector better
than the concerns of public practice” and recognized there
are real differences between city attorneys and private
practitioners representing corporate entities.16 The opinion
ultimately concluded, however, that the Legislature did not
intend to “supersede or impair the attorney-client privilege”
when it enacted several laws (discussed below) to protect
government employee whistleblowers.17 Accordingly, the
city attorney’s duty is to maintain client confidentiality.
Courts have expressed the principle that city attorneys are
subject to special ethical obligations in the “furtherance of
justice.”11 In the context of whistleblowing on suspected
malfeasance, that special obligation appears in conflict
with the duty of confidentiality. For example, if city officials
empowered to protect the city are themselves guilty of
violating the law or committing waste that harms the city,
then how can the city attorney protect his or her client?
While the client is not the individual official who committed
the malfeasance, that official may be the highest officer over
the engagement. If so, then to whom may the city attorney
disclose the malfeasance?
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If the highest city officer refuses to act, or is also guilty of
malfeasance, then should the city attorney keep quiet and
knowingly allow his client, the city, to suffer due to the
putative illegal actions of its individual representatives?
While Rule 3-600(B) permits, but does not require, the city
attorney to go up the chain of command, it prohibits the city
attorney from disclosing any confidential information beyond
the organization. If the highest authority is the city council,
and not a particular individual within city government, then
the city attorney may address his or her concerns to the
council itself. Since California cities function under various
forms of city government (council-manager, strong-mayor,
etc.), the general rule should be considered in light of the
particular governing structure of the city in question. For
example, in a strong-mayor form of government, the mayor
may be the highest level of authority empowered to speak
or act on behalf of the city, though even that broad authority
may be limited or applied based on particular charter or
municipal code provisions.
The issue of what a city attorney could have done is likely
to come to the forefront if a city’s highest ranking officials
are committing egregious misconduct the city attorney
might have known about. City attorneys should be mindful
of the damage such actions have on the public’s trust in
local government, as well as the confidence they place with
cities’ legal officers. When confronted with this dilemma
it is recommended the city attorney contact the State Bar
ethics hotline.
Practice Tip:
City attorneys facing the difficult question of whether
they should or must withdraw from representing a
client that may be violating the law may wish to seek
the advice and assistance of special ethics counsel.
3. Grand Jury Proceedings
For a discussion of the privilege in grand jury proceedings,
please see chapter 8.
C. WHISTLEBLOWING STATUTES AND THE DUTY
OF CONFIDENTIALITY
To protect government employees who report criminal
action by government officials, the California Legislature
enacted four “whistleblower” statutes: the California
Whistleblower Protection Act,18 the Whistleblower Protection
Act,19 the Local Government Disclosure of Information
Act20 and the Whistleblower Protection Statute21 (jointly the
“Whistleblower Laws”). The Legislation sought to prevent
abuses within the government by protecting employees
who might otherwise not report wrong-doing for fear of
losing their jobs. The Whistleblower Laws built upon the
history of earlier statutes related to reporting government
malfeasance by expanding whistleblower protections.22 The
Whistleblower Laws protect from retaliation those public
employees who disclose nonpublic information regarding
malfeasance in their respective agencies that harms the
public interest.
1. California Whistleblower Protection Act
(CWPA)
The CWPA protects employees of state agencies who
disclose activities that (1) violate state or federal laws or
regulations, (2) constitute economic waste or (3) involve
gross misconduct, incompetence or inefficiency.23 The Office
of the State Auditor administers the law and investigates
and reports on improper governmental activities.
2. Whistleblower Protection Act (WPA)
The WPA expands the protections found in the CWPA and
gives state employees the right to disclose government
malfeasance to the Legislature.24 However, the WPA includes
language that a court would likely interpret as excluding
government attorneys’ disclosure of confidential client
information from the protections of the WPA. Specifically,
the WPA states “[n]othing in [the operative] section shall be
construed to authorize an individual to disclose information
otherwise prohibited by or under law.”25
3. Local Government Disclosure of Information
Act (LGDIA)
The LGDIA extends whistleblower protections to the
municipal level by encouraging local government employees
to disclose information regarding gross mismanagement,
a significant waste of public funds, abuse of authority, or
dangers to public health and safety.26
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CHAPTER 7: THE DUTY OF CONFIDENTIALITY
4. Whistleblower Protection Statute (WPS)
California Labor Code section 1102.5 prohibits employers
from retaliating against an employee for disclosing a
violation of state or federal law.27
D. THE WHISTLEBLOWER LAWS VS. THE DUTY OF
CONFIDENTIALITY
The California Supreme Court declined to modify Rule
3-600 to protect public agency attorneys from professional
discipline in the event they choose to disclose confidential
information relating to official malfeasance noting that
such a modification would conflict with the fundamental
duty of confidentiality state law imposes on attorneys.28
Also, two attempts by the Legislature to provide that
protection were vetoed.29
The Attorney General has also addressed whether the
Whistleblower Laws supersede existing statutes and rules
governing the attorney-client privilege.30 In determining
that Whistleblower Laws do not supersede those statutes
and rules, the Attorney General relied on the separation
of powers doctrine, the rule of statutory reconciliation
and the failure of the Legislature to express its intent to
supersede the “strong and long established public policy”
of client confidentiality.31
1. Statutory Reconciliation
The Attorney General stated that “statutes must be
harmonized to the extent possible…and construed in the
context of the entire system of which they are a part.”32
Some of the Whistleblower Laws included language
permitting disclosure “to the extent not expressly prohibited
by law.” The Attorney General interpreted the express
enumeration of statutory bans that would not apply to
whistleblowers to manifest legislative intent to not alter the
obligation of attorneys under Business and Professions Code
subsection 6068(e), a current and well-established law that
is not enumerated in the Whistleblower Laws.33
2. Lack of Express Provisions Overturning WellEstablished Law
The Attorney General noted that in General Dynamics Corp.
v. Superior Court, the court made clear that “[e]xcept in
those rare instances when disclosure is explicitly permitted
or mandated by an ethics code provision or statute, it is
never the business of the lawyer to disclose publicly the
secrets of the client.”34 Since State law does not make clear
an intent to either change the client confidentiality laws,
or modify the existing ethical code provisions, the Attorney
General declined to conclude the Whistleblower Laws
supersedes the duty of confidentiality.35
3. Separation of Powers
The Attorney General also made a brief separation of powers
argument noting the regulation of the practice of law has
been “recognized to be among the inherent powers of the
courts; the courts are vested with the exclusive power to
control the admission, discipline, and disbarment of persons
entitled to practice before them.”36 The opinion recognized
the tension between the Legislature and the courts in
this area, stating the Legislature may regulate and control
the practice of law to a “reasonable degree,” but may not
restrict the court’s authority to discipline persons entitled to
practice before it.37 Any attempt to do so would “overstep
constitutional bounds.”38
No law requires a city attorney to become a whistleblower
and, as stated previously, no law protects city attorneys who
choose to do so. Nevertheless, a city attorney representing a
client who is committing malfeasance in office is confronted
with the personal ethical choice of whether to terminate
that representation knowing he/she cannot make a public
disclosure about the reasons underlying that potential
departure.39 As a public official and officer of the court, a
city attorney may feel a personal obligation to make the
public aware of wrongdoing where communicating with
the highest level of authority in the city has not succeeded
in bringing about a termination of the wrongdoing. The
consequences of a disclosure will be vulnerability to charges
of violating Rule 3-600 and Business and Professions Code
section 6068.
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CHAPTER 7 ENDNOTES
1
People, ex rel. Department of Corporations v. SpeeDee Oil Change
Systems, Inc., 20 Cal.4th 1135, PIN [Emphasis added, internal
citations omitted.]
2
Solin v. O’Melveny & Myers, LLP, 89 Cal.App.4th 451, 457 (2001),
quoting Mitchell v. Superior Court, 37 Cal.3d 591,600 (1984).
3
Styles v. Mumbert, 164 Cal.App.4th 1163, 1167 (2008) [citations
omitted]
4
Ibid. [“So fundamental is this precept that an attorney continues to
owe a former client a fiduciary duty even after the termination of
the relationship.”]
5
Federal Rules of Evidence, Rule 501.
6
Federal Rules of Evidence, Rule 502.
7
Please see a report on this issue at:
http://www.americanbar.org/advocacy/governmental_legislative_
work/priorities_policy/independence_of_the_legal_profession/
federal_agency_privilege_waiver_politics.html
8
Ward v. Superior Court, 70 Cal.App.3d 23, 35 (1977) [holding that
the client of the county counsel was the county, acting through its
board of supervisors].
9
California Rules of Professional Conduct, Rule 3-600(B).
10 Id. at subsections (B) and (C).
11In People ex rel. Clancy v. Superior Court, 39 Cal.3d 740, 745
(1985), a private attorney retained by a city under a contingent fee
arrangement to prosecute civil nuisance abatement actions was
ordered disqualified, in the interests of justice, because his personal
stake in the actions was inconsistent with the neutrality required
of a government lawyer when prosecuting a nuisance abatement
action.
24Doskow, supra note 1, at 31 [citing California Government Code
section 9149.21].
25 Id. (citing California Government Code section 9149.23(c)).
26Doskow, supra note 1, at 31, [citing California Government Code
section 53296(c)].
27 California Labor Code section 1106 and Hansen v. Department of
Corrections & Rehabilitation, 171 Cal. App.4th 1537 (2008) apply
that section to public employees. However, Edgerly v. City of
Oakland, 211 Cal. App.4th 1191 (2012) determined that section only
applies to disclosure of state or federal laws, not enactments of a
charter city.
28 California Rules of Professional Conduct 3-600, S104682, Minutes
of the California Supreme Court (May 10, 2002), appearing in the
Advance Sheets of California Official Reports, Vol. 16 (June 16,
2002).
29 AB 363 (2002) would have protected city attorneys from
professional discipline for referring a matter regarding malfeasance
in office (1) to a higher authority in the organization, and (2) to law
enforcement in specified circumstances. However, that bill was
vetoed by Governor Gray Davis.
AB 2713 (2004) would have expanded the exception to the duty of
confidentiality by authorizing an attorney “who, in the course of
representing a governmental organization, learns of improper
governmental activity…to refer the matter to law enforcement or
to another governmental agency and would exempt the attorney
from disciplinary action for making a referral of the matter.” AB
2713 was vetoed by Governor Arnold Schwarzenegger.
30 84 Ops. Cal. Atty. Gen., supra.
31 Id. at p. 17.
32 Id. at p. 14.
12 California Rules of Professional Conduct, Rule 3-600(B).
33 Id. at p. 15.
13 Id. at subsection (C).
34 General Dynamics Corp. v. Superior Court, 7 Cal.4th 1164 (1994).
14 California Rules of Professional Conduct, Rule 3-700(B) and (C).
35 84 Ops. Cal. Atty. Gen., supra, at 13-18.
15 84 Ops. Cal. Atty. Gen. 71 (2001).
36 84 Ops. Ca. Atty. Gen., supra, at 18 [citing Santa Clara County
Counsel Attys. Assn. v. Woodside, 7 Cal.4th 525, 543 (1994)].
16 Id. at p. 9.
17 Id. at p. 14.
18 California Government Code sections 8547-8547.12.
37 Id. (citing Hustedt v. Workers’ Comp. App. Bd., 30 Cal. 3d 329, 337
(1981)).
19 California Government Code sections 9149.20-9149.22.
38 Id. at 19.
20 California Government Code sections 53296-53297.
39 California Rules of Professional Conduct, Rule 3-600(B).
21 California Labor Code section 1102.5.
22 Former Government Code sections 10540, 10541, 10542, 10543,
10544, 10545, 10546, 10547 (Stats.1981, ch. 1168, § 7, pp. 46944696); former Government Code section 10549 (Stats.1984, ch.
1212, § 6, p. 4160); former Government Code section 10548
(Stats.1986, ch. 353, § 4, pp. 1511-1512); former Government Code
sections 10550 and 10551 (Stats.1988, ch. 1385, § 3, pp. 46684669).
23 Charles S. Doskow, The Government Attorney and the Right to Blow
the Whistle: The Cindy Ossias Case and Its Aftermath (A Two-Year
Journey to Nowhere), 25 Whittier L. Rev. 21 (2003), at 30 [citing
California Government Code section 8547.2].
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CHAPTER 8: THE CITY ATTORNEY AND GRAND JURIES
CHAPTER 8:
THE CITY ATTORNEY AND GRAND JURIES
A.INTRODUCTION
City attorneys are often called upon to help their clients
respond to grand jury investigations, subpoenas, reports,
and, in rare cases, state and federal indictments. The vast
majority of grand jury issues that city attorneys face arise
out of grand juries acting in their civil capacity. This chapter
addresses the ethical issues that may arise in each of these
contexts and the roles and duties of the city attorney.
B. CALIFORNIA LAW
California requires the summoning of a grand jury each year
in every county.1 California’s statutory provisions concerning
the formation, composition and functioning of grand juries
are found in Penal Code sections 888 through 939.91.2 A
grand jury has 11 to 23 persons (depending on the size of
the county) “returned from the citizens of the county before
a court of competent jurisdiction, and sworn to inquire of
public offenses committed or triable within the county.”3
Most grand juries have jurisdiction over both criminal and
civil matters and serve three essential functions:
Act as the public’s “watchdog” by investigating and reporting
on local government operations, accounts, and records.4
»» Examine criminal charges and determine whether
criminal indictments should be returned.5
»» Hear allegations regarding willful or corrupt
misconduct by a public official and determine
whether to present formal accusations requesting
the official’s removal from office.6
Grand juries have only those powers expressly granted
by statute.7 Accordingly, the authority of grand juries to
investigate cities and issue reports is only as extensive as
expressly authorized by statute.8 The authority of grand
juries to investigate cities, counties and special districts is
set forth in Penal Code sections 925 through 933.5.
Initially, the investigatory power of grand juries was limited
to cities’ finances; however, in 1983, the grand juries’
authority to investigate cities was greatly expanded and
grand juries are now authorized to “examine the books and
records of any incorporated city” as well as “investigate and
report upon the operations, accounts, and records of the
officers, departments, functions, and the method or system
of performing the duties of any such city…”9 The grand jury’s
authority, however, may be limited to procedural matters
and not substantive policy concerns.10
In conducting investigations, grand juries may employ
experts and assistants to supplement their investigations.11
Grand juries also may request issuance of subpoenas to
compel witnesses to attend grand jury proceedings.12
When a grand jury is questioning witnesses at a grand jury
session, the presence of non-witnesses (including counsel
for witnesses in civil proceedings) is prohibited,13 except
that a witness may have counsel present when testifying
under oath before a civil grand jury.14 Also, a grand jury may
admonish a witness not to disclose what the witness learns
in the grand jury room, but cannot require the witness to
execute an admonishment form.15
While grand juries have much latitude in conducting
investigations, the California Attorney General has
opined that grand juries may not compel the disclosure
of information protected by attorney-client or attorney
work-product privileges.16 In fact, based on the broad
interpretation of the Attorney General regarding the
applicability of the attorney-client and attorney workproduct privileges in the non-criminal setting it is arguable
that grand juries are not entitled to other materials or
information protected by constitutional, statutory or
common law privileges.17 It is possible, however, that
this standard could be relaxed when grand juries are
investigating misconduct of public officials.
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PRACTICING ETHICS: A HANDBOOK FOR MUNICIPAL LAWYERS, 2014
After a civil investigation is concluded, the grand jury
issues a final report that contains its findings and
recommendations.18 No later than 90 days after the grand
jury has submitted its report, Penal Code section 933(c)
requires “agencies” (including cities, housing authorities,
and districts) to submit a written response to the grand
jury report to the Presiding Judge of the Superior Court.19
The respondent must respond in writing to each finding
indicating whether it agrees disagrees, in whole or in
part, with the finding.20 In addition, the written response
must indicate whether the recommendation has been
implemented, will be implemented, requires further analysis,
or will not be implemented.21
Practice Tip:
Prior to conducting a formal investigation, grand
juries will sometimes issue requests for information
and documents to determine whether the grand jury
should initiate a formal investigation. These requests
for information are often directed to staff, and the city
attorney should ensure that a process is in place so
that the city attorney is notified of these requests and
has an opportunity to assert appropriate objections.
Civil grand juries gather most of their information in
committees of three that interview city officials and take the
information back to the full grand jury. Most information is
confidential, but a grand jury may obtain judicial approval to
release non-privileged information to the public.22
City staff members may ask the city attorney to accompany
them to these interviews to explain the laws that underlie
the staff action on a specific matter. The city attorney should
advise the official that the city attorney may not attend
the interview without the consent of the members of the
committee. The officials who will be meeting with the grand
jurors should ask in advance of the meeting whether the city
attorney may accompany the officials.
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Also, grand juries may issue a final report that is not directed
to the City Council or City Manager.23 For instance, a grand
jury may send the final report to the Chief of Police for
response. In these situations, it is important to ensure that
a process is in place to insure that the City Council and
City Manager are made aware of the final report so the
City Council can approve a response to the findings and
recommendations as required by law.
C. FEDERAL LAW
Grand juries are recognized in the Fifth Amendment to the
United States Constitution which provides that “[n]o person
shall be held to answer for a capital, or otherwise infamous
crime, unless on a presentment or indictment of a Grand
Jury‑”24 This protects against unwarranted prosecution
by requiring charges to be brought by presentment or
indictment.25
The formation, composition and function of federal grand
juries can be found in Rule 6 of the Federal Rules of
Criminal Procedure.26 Federal grand juries are formed by
the court’s order when “the public interest so requires” and
are composed of between 16 to 23 persons.27 However, no
matter how many grand jurors are on the grand jury, it takes
a vote of 12 grand jurors to issue an indictment.28
Currently, there are two different types of grand juries in the
federal system: “regular” grand juries and “special” grand
juries.29 A regular grand jury primarily considers whether,
based on the evidence presented, there is probable cause
to believe a crime has been committed and that they should
“return” an indictment (i.e., charge a person with those
crimes).30 In addition to regular grand juries, in 1970, to
combat organized crime, Congress created special grand
juries that may issue not only an indictment but also a
report on its investigation. Generally, special grand juries are
created for specific investigative purposes.31
A federal grand jury is highly dependent upon the prosecutor
for many of its functions. This is because, while the grand
jury can also investigate matters and subpoena evidence,
it is usually the prosecutor who proposes the charges and
gathers the required evidence for consideration.32
CHAPTER 8: THE CITY ATTORNEY AND GRAND JURIES
Like California grand juries, the power of the federal grand
jury to investigate and subpoena documents is limited.
Under Rule 501 of the Federal Rules of Evidence, privileges
are “governed by the principles of common law.”33 Rule
1101(d)(2) of the Federal Rules of Evidence states that the
privileges are applicable to grand jury proceedings.34 Thus,
the attorney-client privilege and work-product doctrine
recognized by Rules 501 and 502 of the Federal Rules of
Evidence apply to grand jury proceedings. However, because
federal grand juries are criminal in nature, the privileges
applicable to federal cases are more limited. In fact, the
Supreme Court has warned against expansive construction
of privileges for criminal cases since the proceedings of
a criminal trial are a “search for the truth” and civil cases
do “not share the urgency or significance of the criminal
subpoena request.”35
D. ETHICAL ISSUES RAISED BY WORK INVOLVING
GRAND JURIES
Three common ethical questions arise in responding to
grand jury investigations, subpoenas and reports:
»» Who is the client?
»» What materials are not protected by the attorneyclient, attorney work-product and other privileges?
»» When are city attorneys required to recuse or
disqualify themselves?
1. Who is the Client?
The city attorney represents the city as a legal entity and
not individual elected officials or staff who may be the
subjects of a grand jury investigation. (See chapter 1.)
While the city is the client, in certain circumstances, it
may be in the city’s interest to disclose information that
would be subject to the attorney-client privilege so that
the grand jury is fully informed of all relevant facts. In this
instance, the city attorney should seek a waiver of the
attorney-client privilege from the city council or other
competent official or agency.
Practice Tip:
City attorneys cannot and should not promise
individual public officials that they will keep
confidences from the city council and other city
officials. City attorneys should remind staff or
officials who approach them for advice regarding
grand jury investigations or subpoenas that the city
attorney’s client is the city, not the individual staff
member or official.
2. The Attorney-Client Privilege and Attorney
Work-Product Privilege
As referenced above, grand juries may not compel the
disclosure of information protected by attorney-client or
work-product privilege.36 In California, despite the absence
of an express statutory exemption from the privilege
for grand jury proceedings, the Attorney General has
issued an opinion that the protections for attorney-client
communications afforded by Evidence Code section 910
apply to grand jury proceedings.37
The California Attorney General has also opined that the
attorney work-product privilege applies in county grand
jury proceedings because of the common law’s recognition
of the broad applicability of the privilege, the similarities
between grand jury proceedings and pretrial discovery, and
because “the various privileges found in the Constitution,
statutes and common law historically have been applied in
grand jury proceedings.”38 It is this last rationale that allows
cities to put up a broad resistance to grand jury inquiries of
privileged communications in grand jury proceedings. But
as noted above in discussing the attorney-client privilege
in the context of a federal grand jury’s investigation of a
federal official, courts could conclude that in the context
of public agencies the need for the grand jury to conduct
thorough investigations outweighs the protections of
attorney-client privilege.
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Public entities have a right to assert the attorney-client
privilege with respect to communications made in the
course of the attorney-client relationship.39 With regard to
city business, the city itself is the client; however, the city
is not a natural person and it communicates — like other
corporations — through people. City officers and employees
may claim the attorney-client privilege derivatively. At times,
the attorney-client privilege may attach to communications
between the city attorney and other city officials.41
Communications between the city attorney and the mayor,
council members, city manager, city clerk, city treasurer,
and department heads, while acting in their official capacity,
are protected by the attorney-client privilege. While the
applicability of the attorney-client and/or work-product
privileges to public officials may be more limited in criminal
matters, it appears reasonably settled that where city
staff or officials are acting in their official capacities and
do not have interests adverse to the city, and there is no
alleged wrongdoing, the advice they have sought from, the
information they have provided to and advice they have
received from, the city attorney are protected by attorneyclient privilege and a grand jury may not obtain such
information by subpoena.
That said, the attorney-client privilege does not protect,
and a grand jury can obtain, information disclosed to a city
attorney by a staff member or official who was not acting
in his or her official capacity. Similarly, the attorney-client
privilege does not apply to communications to the city
attorney from staff members or officials whose interests are
adverse to the city’s interest.42 For example, the attorneyclient privilege will not shield communications or requests
for advice regarding crime or fraud.43
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As discussed in chapter 7, federal courts have limited the
applicability of the attorney-client privilege when a federal
grand jury is investigating a federal official for commission of
a crime in office, and the federal official asserts the attorneyclient privilege to prevent the grand jury from questioning
the government attorneys who advised the official. The
core rationale for the decision is that the attorney-client
privilege belongs to the government and should not prevent
the grand jury, another governmental agency, from attaining
information regarding official misconduct in office. A federal
grand jury might take the same approach when investigating
local and other non-federal officials.
Practice Tip:
City attorneys should remind any staff member or
official who starts to provide information about possible
criminal wrongdoing that the attorney-client privilege
does not protect this information and that the city
attorney may be compelled to disclose it to the grand
jury and is obligated to disclose it to the city council.
In circumstances where a staff member is being asked to
disclose information to a grand jury that may be subject to
the attorney-client privilege, the city attorney must keep in
mind who holds the privilege for the city, which usually will
be the city council. In most cases, as holder of the privilege,
only the city council or other highest agency of officer with
jurisdiction over the subject matter — not individual council
members, or the staff member or attorney being contacted
by the grand jury — can waive the privilege and disclose the
information. In the event the city council or other Brown Act
body holds the privilege, it must therefore deliberate in open
session when considering waiver of the privilege.
CHAPTER 8: THE CITY ATTORNEY AND GRAND JURIES
Where the grand jury is requesting information that is
protected by the attorney-client privilege, the city council
or other competent agency or officer - acting through
the city attorney — has the authority to demand that the
employee refuse to provide the requested information to
the grand jury. However, four whistleblower statutes place
an important limitation on this authority.44 These statutes
are designed to protect government employees who report
criminal activity by government officials. Whistleblower
statutes may protect from retaliation public employees who
disclose confidential information to a grand jury regarding
criminal actions of the city if they follow the procedural
requirements of the whistleblower statutes. These statutes,
however, do not protect city attorneys. (See chapter 7.)
When responding to or providing advice relating to a grand
jury subpoena or report, it may be necessary under certain
circumstances for the city attorney to recuse himself or
herself and hire outside counsel to handle the matter.
For example, the city attorney should recuse himself or
herself in the event a grand jury is investigating an issue
on which the city attorney made errors, that, if revealed to
the public in a grand jury report, might result in legal action,
malpractice, negative performance review, or significant
embarrassment for the city attorney. Because the city
attorney may be more concerned with his or her personal
interest in withholding particular information from the grand
jury rather than with the best interests of the city, the city
attorney should recuse himself and recommend that the city
hire outside counsel under rule 3-310. (See chapter 2.)
Practice Tip:
City attorneys can assist grand juries in working
more effectively with cities. Broad, unfocused or
misdirected grand jury investigations and subpoenas
can consume significant amounts of city attorney
and city staff time. Grand juries generally receive
formal training on numerous subjects when they are
impaneled. Based on a series of interviews of grand
jurors, grand jury experts, and a supervising judge, it
appears that, at least in some counties, the curriculum
includes very little, if anything, about how cities
operate. City attorneys should consider contacting the
presiding judge of their superior court and offering to
supplement the current grand jury training program
by meeting with the grand jury when it is impaneled
to explain the structure of city departments, the
city’s major reports, and contact people at the city for
various types of information. City attorneys should also
encourage the city’s officers and employees to fully
cooperate with the grand jury.
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CHAPTER 8 ENDNOTES
32 United States v. Sells Eng’g, Inc., 463 U.S. 418, 430 (1983).
1
California Constitution article I, section 23.
33 Fed. R. Evid. 501.
2
California Penal Code section 888 et seq.
34 Fed. R. Evid. 1101(d)(2).
3
California Penal Code sections 888 and 888.2.
4
California Penal Code sections 925 et seq.
35 In re: Bruce R. Lindsay, 148 F.3d 1100 (D.C. Cir. 1998); Cheney v. U.S.
Dist. Court for Dist. of Columbia, 542 U.S. 367, 384 (2004).
5
California Penal Code section 917.
6
California Penal Code section 922; and Government Code section
3060 et seq.
7
McClatchy Newspapers v. Superior Court, 44 Cal.3d 1162, 1172
(1988).
8
Thomas B. Brown, The Investigatory and Reporting Authority of
Civil Grand Juries Acting in Their “Watch Dog” Capacity, League of
California Cities Annual Conference 1, i, ii (1995) [footnote omitted].
The grand juries’ authority may or may not apply in a charter city.
See, e.g., People v. Hulburt, 75 Cal.App.3d 404 (1977); Curphey v.
Superior Court In and For Los Angeles County, 169 Cal.App.2d 261
(1959).
40 D.I. Chadbourne, Inc. v. Superior Court, 60 Cal.2d 723, 736-38,
(1964); Hamilton v. Town of Los Gatos, 213 Cal.App.3d 1050, 1059
n.7 (1989).
California Penal Code section 925a.
44 California Government Code sections 8547-8547.13, 9149.209149.23, 53296-53299; California Labor Code section 1102.5.
9
10 78 Ops.Cal.Atty.Gen 290 (1995).
11 California Penal Code section 926(a).
12 California Penal Code section 939.2.
13 California Penal Code section 939; Farnow v. Superior Court, 226
Cal.App.3d 481, 489 (1990).
14 California Penal Code section 939.22.
15 70 Ops.Cal.Atty.Gen. 28 (1987).
16 86 Ops.Cal.Atty.Gen. 101 (2003).
17 70 Ops.Cal.Atty.Gen. 28 (1987).
18 California Penal Code section 933.
19 California Penal Code section 933(c).
20 California Penal Code section 933.05(a).
21 California Penal Code section 933.05(b).
22 California Penal Code sections 924, 924.1-924.6, 939.1; City of
Woodlake v. Tulare Cnty. Grand Jury, 197 Cal.App.4th 1293 (2011).
23 California Penal Code section 933(c).
24 U.S. Constitution amendment V.
25 Wood v. Georgia, 370 U.S. 375, 390 (1962).
26 Fed. R. Crim. P. 6.
27 Fed. R. Crim. P. 6(a)(1).
28 Fed. R. Crim. P. 6(f).
29 Fed. R. Crim. P. 6; 18 U.S.C.A. § 3331-3334.
30 Fed. R. Crim. P. 6.
31 United States v. Handley, 407 F.Supp. 911, 914 (N.D.Ind. 1976); 18
U.S.C.A. § 3333(a).
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36 70 Ops.Cal.Atty.Gen. 28 (1987).
37 70 Ops.Cal.Atty.Gen. 28 (1987); California Evidence Code sections
901, 910, 950.
38 70 Ops.Cal.Atty.Gen. 28 (1987).
39 Roberts v. City of Palmdale, 5 Cal.4th 363, 370-72 (1993).
41 70 Ops.Cal.Atty.Gen. 28 (1987).
42 California Evidence Code section 950 et seq.
43 California Evidence Code section 956.
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